Talk has already been made that Europe is on the move towards going cashless, and in one country it’s already happening. According to a CNBC report, it’s been discovered now that only about 2℅ of all financial transactions in the country are made using cash because consumers have preferred the convenience of digital payments. In particular, a regular banking and debit card app known as Swish has grown in use and the country is heavily invested in the tech industry. While it’s certainly made business easier for many merchants, but it’s now sparking concern for many legislators and parliamentary members who see the potential dangers of not having access to cash. This is because the lower consumer demand for cash has seen fewer notes printed by the central bank.
The problem for Sweden is that even though most of their population, particularly those in Stockholm and the other major cities could practically live without needing cash, those who live in rural areas, the elderly and migrants still have a need for it. But there’s also the problem of a festival financial crisis that might hit such as deflation which could result in negative interest rates and could trigger a demand for cash. But having short supplies of it could have dire consequences for bank customers.
Many store owners in parts of Sweden are already putting signs on their shops saying they don’t accept cash. It’s long been law that the krona has to be accepted by merchants, but there are loopholes in that law that retailers have found and are taking advantage of because they want to run their stores at maximum efficiency. Yet lawmakers are still looking for a balance between having an availability of cash but still going with consumer trends.
One solution they are looking at is cryptocurrency with a possible ekrona being circulated along with the regular krona. Yet the volatility and potential crash of other digital currencies like Bitcoin and ethereum is still giving central bank leaders pause. Sweden appears to be taking a lead in the all digital currency world, but even nations like the UK which still uses cash as much as ever are following them.