Sweden, the Scandinavian nation famous for ABBA, Björn Borg, and Volvo, is leading the way when it comes to becoming the world’s first cashless country – and the technology behind Bitcoin, and the cryptocurrencies it has spawned, is catalysing the process.
Two years ago, in October 2015, Niklas Arvidsson, a researcher in industrial economics and management at the KTH Royal Institute of Technology in Stockholm, helped to produce a study that predicted his country would be the first to introduce a cashless society. “Cash is still an important means of payment in many countries’ markets, but that no longer applies here in Sweden,” he said.
The progressive Swedes are on course to achieving their lofty aim, and other Scandinavian nations are following suit. Consider that reports indicate that 56.3 per cent of the country’s 1,600 bank branches – 900 of 1,600 – neither hold cash nor accept cash deposits any longer. Further, circulation of the country’s traditional currency, the Swedish krona, has been falling for some time; in 2009 the figure was SEK106 billion whereas last year it was just SEK60bn. Why is this happening?
According to data obtained from Visa, Swedes use bank cards three times more often than the average European. And a Riksbank report, published in December 2016, showed that 97 per cent of the country has access to cards, compared with 85 per cent cash.
There are many additional benefits to living in a society that does not need to use cash – not least when it comes to personal safety. People are less likely to be robbed, and also thieves will not as easily be able to sell on their stolen items.
Another key factor is the rise in popularity of Swish, an app owned by six Swedish banks (Danske Bank, Handelsbanken, Länsförsäkringar, Nordea, SEB and Swedbank). It allows anyone with a smartphone to transfer money from one bank account to another, in real time. All that is required is the sender and receiver’s phone numbers.
Swish was launched in 2012 and by the end of 2015 it had attracted 3.6 million users, which is more than a third of Sweden’s 9.9 million population. Also that year some $515 million was transferred using the app. Those eye-opening numbers have increased significantly since, and now even churches have started to reveal their telephone numbers at the end of each service to make it easier for parishioners to boost their coffers.
This trend has forced Sweden’s central banks to consider introducing a digital form of government-backed money, and the technology behind Bitcoin, the pioneering cryptocurrency launched eight years ago, is being promoted as a leading option.
A major concern about going cashless in Sweden is that it could exclude the ‘unbankables’ – that is people without a bank account – and those who do not own a smartphone. Bitcoin, however, has the ability to solve those problems through technology. Users do not require a bank account, and they can, in effect, spend their money anonymously.
Bitcoins and other top cryptocurrencies – Ethereum, Ripple, Dash, Litecoin, and Ethereum Classic – can be purchased outright, and in a straightforward manner, from investment platform eToro, for instance. It has six million members across 140 countries and the company’s motto is “crypto needn’t be cryptic”. Trading on eToro is attractive because it has a fast online verification process, global offices (including in the United Kingdom), and members can use the CopyTrader tool to match the strategies of top-performing traders.
Many in the FinTech space believe the Blockchain, a decentralised ledger which is the backbone of cryptocurrencies, is the real game-changing innovation. In Sweden, and elsewhere, they have already toyed with ways in which it can be used in their public services. And sooner rather than later it could well underpin the world’s first cashless society.
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