Gold Protects As Cashless Society Threatens Vulnerable

– Swedish authorities concerned cashless society is happening ‘too quickly’ and heading into ‘negative spiral’

– Only 25% of Swedes paid in cash at least once a week in 2017, 36% never use cash

– Cash usage in Sweden falling both as share of GDP and in nominal terms

– Sweden may be world’s first economy to introduce a cryptocurrency, the e-krona

– Cashless is not a disincentive for illegal drug trade, Guardian finds

– Gold in safe jurisdictions will protect against raids on cash and wealth

The total value of cash payments in Sweden is just 2% of GDP. Two-thirds of people rarely use cash and even homeless Big Issue sellers are accepting cards. These are the statistics of Sweden’s cashless society. A country, which is often touted as the most cashless on earth, is in part proud of these numbers but also wonders if it might be too much too soon.

A campaign, called Kontantupproret (“the cash insurgency), demands that the future of money should be a democratic decision, not left just to banks and businesses. Many believe that the cashless society is leaving the old, unbanked and vulnerable behind.

The concerns are so great that a parliamentary review has been launched and central bank, Riksbank, is planning on launching a study into the unintended consequences of the cashlesss society, this summer.

“If this development with cash disappearing happens too fast, it can be difficult to maintain the infrastructure” for handling cash, said Mats Dillen, the head of the parliamentary review. ““One may get into a negative spiral which can threaten the cash infrastructure,” Dillen said.

Banks are now so loathed to work with cash that Riksbank Governor Stefan Ingves has said they may consider forcing banks to provide cash to customers. But this is tricky when the wider economy is no longer set up to accept it.

As we have highlighted before, going cashless may make sense to many businesses in terms of keeping costs down but it makes the most sense to the government and banks who gain full oversight and access to your money once it can only be kept in digital form.

This cashless dream is likely to turn into a nightmare. Not only for the vulnerable but also for anyone who likes to have the final say on what happens to their wealth.

Sweden’s Gone Too Far

The value of cash in circulation has fallen to its lowest level since 1990 and is more than 40% below its 2007 peak. The extreme push for cashless has seen the amount of cash in circulation fall, especially dramatically in 2016 and 2017.

Strangely the central bank are now looking into launching the e-krona, a digital currency which will work as a complement rather than a replacement to cash. The jury is out on whether or not this is as much a PR stunt as it is a further ‘solution’ for the cashless economy.

Sweden may have moved too quickly as protest groups are beginning to rally against the cashless economy. Some declare the refusal to accept cash as undemocratic whilst the elderly are being rapidly locked out of services that would have previously been open to cash payments.

If you have the means to pay in the legal tender (in this case krone) then who is to say how you can pay? After all, currently cash is not illegal, so why are so many people being made to feel like they’re wrong to use it?

Going cashless arguably increases the number of vulnerable economic participants. This isn’t meant in reference to those who are unbanked. In fact, the opposite: Those who are currently society’s least vulnerable – those with savings, investment portfolios and a good banking relationship – could become extremely vulnerable.

How do you go cashless without a bank?

There is also the issue of those who are simply unable to offer anything other than cash – the unbanked.

“The beauty of cash is that it’s a direct and simple transaction between all kinds of different people, no matter how rich or poor,” financial writer Dominic Frisby told The Guardian. “If you begin to insist on cashlessness, it does put pressure on you to be banked and signed up to financial system, and many of the poorest are likely to remain outside of that system. So there is this real danger of exclusion.”</