A more radical proposal still would be to remove the ZLB constraint entirely by abolishing paper currency. This, too, has recently had its supporters (for example, Rogoff (2014)). As well as solving the ZLB problem, it has the added advantage of taxing illicit activities undertaken using paper currency, such as drug-dealing, at source.
...One interesting solution, then, would be to maintain the principle of a government-backed currency, but have it issued in an electronic rather than paper form.
...Would such a monetary technology be feasible? In one sense, there is nothing new about digital, state-issued money. Bank deposits at the central bank are precisely that. The technology underpinning digital or crypto-currencies has, however, changed rapidly over the past few years. And it has done so for one very simple reason: Bitcoin.
...These questions do not have easy answers. That is why work on central bank–issued digital currencies forms a core part of the Bank’s current research agenda (Bank of England (2015)). Although the hurdles to implementation are high, so too is the potential prize if the ZLB constraint could be slackened. Perhaps central bank money is ripe for its own great technological leap forward, prompted by the pressing demands of the ZLB.
[source : How low can you go?, Andrew Haldane, Bank of England, http://www.bankofengland.co.uk/publications/Pages/speeches/2015/840.aspx, 18th September 2015]
NB: the reference to drugs. This is why Soros etc are trying to legalise drugs. They know a digital currency is coming and want to corner the market in drugs before this is introduced. I've been warning about this.
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