Sweden up barely 2% of the value of all

Sweden has
endured radical shifts in spending behaviours and are on track to become the
first cashless society without any adverse consequences, with physical cash
being a dying method of payment amongst Swedes. Sweden were the first to
introduce paper notes in Europe and now they are on course to be the first
cash-free country. In Sweden, cash payments are not accepted on public transport
systems, shops or cafes and even homeless people accept card payments in Sweden.
In 60% of Swedish banks you cannot deposit or withdraw cash consequenting in a
steep decline in bank robberies (Laurenson 2017).  Between 2009 and 2015 the circulation in cash
has decreased consecutively and has fallen 15% in this time shown in figure 3.
Meanwhile electronic payments have been increasingly popular as 95% of Swedes
have card payment access.  According to
central bank the Riksbank, cash transactions made up barely 2% of the value of
all payments made in Sweden last year – a figure some see dropping to 0.5% by
2020. Sweden’s central bank Riksbank knows that any potential digital
currencies would have to co-exist alongside cash when initially introduced.
Introducing the e-krona, is a new concept for the central bank and there is no
precedent following.

 

 

 

 

 

 

 

 

 

Figure 3-Physical currency
circulation in Sweden

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Source: Bloomberg
2016

However, in
Sweden scrapping cash is not as easy as it sounds. Sweden have developed
adversity towards cash even in the current regime with Riksbank continuation of
purchasing large quantities of government bonds and their interest rates set
at-0.5%, the lowest in the world, with the Riksbank maintaining this dovish
perspective even though economic growth soaring and inflation fluctuating
around its target. By banks charging negative interest rates, people aren’t
able to withdraw from their accounts and Swedes cannot hide any money causing
resistance to developing, with many protesting against the looming threat of a
cashless society.