In Japan, they are not messing around - the Japanese government appears to be considering the abolition of cash. This is evil that everyone remotely concerned about freedom should be willing to rise in arms against.
As can be expected, the idea is sold as kind of cool, sci-fi, futuristic, avant-garde to hoi polloi. A noble justification is ready for the slightly more sophisticated - "we" need to fight the evil deflation. This is BS of epic, retch-inducing proportions.
The Japanese government is drowning in enormous and growing debt, even though Japan has the highest corporate tax rate in the civilized world, and is no tax haven by any stretch of the imagination when it comes to personal taxes. It is becoming increasingly hard to squeeze more taxes out of the Japanese economy. The Yen has been strengthening, which is a millstone on the neck of the export-oriented Japanese industry. The population is shrinking, especially that of working (and tax-paying) age. Furthermore, the Japanese have been enjoying a Clinton-style peace dividend for the last six decades in terms of light spending on defense - "we are pacifists now, let the Americans defend us". Yeah, well, now they've got a very assertive, industrialized China next door, a nut job in North Korea, and a "new" America that does not seem to be as eager to defend them - even if it formally keeps them under a nuclear umbrella. What's a government to do?
Borrow and spend? It tried the Keynesian prescription in the 90's, spending over 100 trillion yen in 10 fiscal stimulus packages. That did not help, since the spending was concentrated into politically favored industries, notably construction, which took a vicious hit in 1989-1992, with real estate prices falling by 80%. Only a government bureaucrat-genius can think you can cure a burst oversupply bubble by supplying more of the good that you have a glut in. A good chunk of the money also went into keeping zombie companies "alive", even though they could never realistically be expected to become profitable and viable again. Even Paul Krugman, back when he was a reasonably bright economist, wrote: "Japan's postal savings system which channels money into public works projects that have little if any social payoff, is monumentally inefficient; so is the practice of rolling over the debts of companies that will never regain profitability and hence keeping capital employed producing what nobody wants." (Krugman 2001) What those stimulus packages did accomplish was to predictably and spectacularly expand public debt to unheard-of proportions. So to borrow now is kinda difficult, and it would help as much as it did in the 90's, unless you believe that politicians can stop being politicians.
Inflate? The monetarist prescription was tried as well. The discount rate was lowered from 6% in 1990 to 0.5% in 1995, and held there for five years. M2 grew in this period at about 2.5% per annum. This did not translate into commensurate credit expansion - the banking system was clogged with bad loans. Even an abbreviation solution was tried - yes, TARP, TALP, PPIP, etc. have a venerable predecessor - the Fiscal Investment and Loan Programme (FILP), which tried to extend loans by bypassing the banks, and loaning directly to businesses. Extend them it did, but surely enough mostly to the businesses best connected to the LDP, not to the ones that generate growth.
Shrink, cut spending, and deregulate? Okay, comical relief break over. That would be a bit too Austrian, we cannot have such nonsense.
So... the government needs to stimulate consumption, which is politically easier to tax than savings. What's the best way to do that? Stealthily tax savings. Two-birds-with-one-stone solution, if there ever was one. If you remove cash from the economy, and then make interest rates negative, those evil people do not have the notorious option of stuffing cash in mattresses, which is every Keynesian's nightmare. Being able to deny access to money with a phone call to their banker to anyone who you do not like is just an added feature which would never be abused, right? Right? RIGHT?
The scary part is that Japan is already deemed a "testing ground". Which means, if history is a guide, that this is coming soon to an economy near you. It's just too good for any government to pass up.