At the beginning, Chaum did acknowledge that some controversy does surround this proposal, then waved his hand and said, "I have no idea why."
He then went on to completely omit the fact that there is this glaring security hole. Rather it's left to an exercise for the reader. What a cowardly cop-out.
Oh, and he also stated that the system would have to run "in a highly secure data center managed by someone in this room", ignoring the fact that most people in the room could also break in to such a "secure data center".
By banning cash, we can: 1. Prevent banks from becoming "too big to fail" 2. Prevent drug kingpins from amassing huge fortures 3. Prevent corrupt politicians from accepting bribes/campaign contributions
I'm sure there's others, including perhaps even some reasons for the children.
From the article, this is particularly telling - "The idea is to unite Canadian money and foreign brains". Haven't yet seen a statement that says the VC must be Canadian, but the quote implies it. Seems to me that if you're a VC in Canada, you just got a massive handout in the cornering of the immigrant-founded startup market.
Right up to the point that they include in the EULA for the device (yes, it's possible to do that) that they own the copyright on all images output by the device. Really doesn't seem to be too much of a stretch.
Unless, of course, you've got your head in the sand.