Sweden Considers Cashless Society

09/22/2010 20:20

From Numismaster.com

Sweden may be a member of the European Union, but to date it has opted not to join the EU’s currency union. If some people in Sweden have their way it may never be necessary to join the currency union, since they would rather see all coins and bank notes replaced with debit and credit cards.

The subject has been simmering for some time, but was brought to the forefront July 17 through a British Broadcasting Corporation report. In this report it is noted there are high profile proponents of a cashless but plastic and electronic transaction driven society that include former Abba band member Bjorn Eulvaeus, several labor unions, and the Swedish Work Environment Authority.

Marie Jarvas, a bank employee and union member who has been robbed twice, is quoted in the BBC report as saying, “If we can reduce the amount of cash in the banks and in society in general, robberies will also be reduced. … If in the long term we abandon cash completely, there will be no robberies because there’s no point in robbing a bank if there’s no cash there to steal.”

Former rocker Eulvaeus is obviously not a coin collector. He recently wrote on his blog that “There are no direct practical reasons, as far as I can see, to have coins and bank notes,” adding, “There are obvious advantages in getting rid of them. Sweden should be able to be the first country in the world to do so.”

I guess Eulvaeus is unfamiliar with electronic warfare, through which all means of electronic transactions could be jammed and possibly wiped out entirely.

Eulvaeus goes further, stating it is patronizing to assume the elderly and others would have difficulty maneuvering through a cashless society. “There are, of course, those who need help, but if as a result they run less of a risk of being robbed then perhaps it would be worth the inconvenience.”

There is little argument that electronic means of payments far outstrip cash transactions not only in Sweden, but in much of the industrialized world today. In Sweden the value of card rather than coin and bank note transactions has increased 500 percent in the past 10 years, while the use of card payment transactions has increased by 800 percent.

London (England) Business School Economics Professor Andrew Scott was quoted by the BBC as saying, “The technology exists for a cashless society. … Its key advantage, in an electronic age, is that it is anonymous and tells you nothing about where it’s been.”

New Welfare Foundation spokesman Par Strom, based in Stockholm, was quick to disagree. Strom said, “If it’s impossible to pay cash when you buy stuff, it’s also impossible not to leave electronic footprints behind you, and the electronic footprints from what you buy put together can tell the entire story about your life. This can be very sensitive information. Most people don’t want this total surveillance society.”

Coin collectors, of course, would side with Strom for other reasons. So would most economists who are familiar with runaway inflation that can be caused by the circulation of too much fiat currency not backed by anything other than the trust in the government and the domestic economy. Unregulated, these electronic transactions could operate the same way.

Regardless of the arguments defending coins and bank notes, it would appear the decision to move towards a cashless society in Sweden may be a done deal, according to the way the BBC account presents the position of Swedish Work Environment Authority spokesman Bernt Nilsson: “Nilsson says it will be several years, at least, before Sweden can finally rid itself of cash.”

In fact, although Sveriges Riksbank or Swedish Central Bank Deputy Governor Lars Nyberg has indicated there is a higher cost to society to use cash rather than plastic and electronic means for transactions the central bank has taken no official position on the debate.

Since, according to the Swedish central bank website, Sweden is still marketing Proof and Mint sets as well as commemorative coins it doesn’t appear the Swedish government is ready yet to discontinue this lucrative money making product.

 

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