Sweden Begins Planning Transition From Cash To Digital Currency

Tyler Durden's picture

In the aftermath of the ECB halting production of the €500 banknote, and more recently, India phasing out its highest denomination bills instantly eliminating some 86% of the cash in circulation as increasingly more countries make a move toward a cash-free society, another central bank - the world's oldest - has started planning its own transition away from paper cash.

Sweden’s Riksbank, which was the first central bank in the world to issue paper currency in the 1660s, is preparing to become a monetary pioneer yet again, and has launched a project to examine what a central bank-backed digital currency would look like and what challenges it would pose.

As Reuters writes, the RIksbank could become the first major central bank in the world to create its own virtual money as the use of cash declines, Deputy Governor Cecilia Skingsley said on Wednesday.

The central bank hopes to take a decision on whether to start issuing what it calls an ekrona in the next two years. What is perhaps more notable is that should the central bank launch a digital currency few would notice; the value of cash in circulation in Sweden has fallen to around 1.5% of GDP from 10% of GDP in 1950.

Sweden is already mostly a non-cash nation: just like Citi in Australia, local bank branches are moving away from cash handling while cash machines are scarce in much of the country. Some shops have stopped accepting cash payments altogether. The Riksbank, like other central banks, already provides electronic money through accounts to banks and clearing organisations. But it only provides central bank money to individuals through notes and coins.

Digital currency functions like payment cards, allowing users to make online transactions across borders instantaneously. It has been growing in popularity as more people use the internet to shop. The major difference between digital and paper currency is that every single transaction is logged, and the value of money can be remotely "adjusted", making it impossible to use cash as an value-preserving alternative to negative interest rates. It is also the reason why central bankers loathe cash in a time of negative interest rates.

"Sweden is on the forefront of this. We don't have any other countries to copy, since there is no other country that is so rapidly stopping using notes and coins as Sweden is," said Skingsley, who gave a speech on the issue on Wednesday.

Defending the move to transition away from cash, the central banker told reporters that "there is a large number of people who for various reasons cannot, do not want to have or do not get access to the commercial banks' payment methods."  She did not explain, however, that the Swedish population would essentially have ceded full control of their "cash" to the central bank.

“We need to do the homework because it’s not an option for the public sector to stay on the sidelines and see the private sector cut off access to central bank money for individuals,” added Skingsley.

Meanwhile, the hyperbole continued: “this is as revolutionary as the paper note 300 years ago. What does it mean for monetary policy and financial stability? How do we design this: a rechargeable card, an app or another way?” Cecilia Skingsley, deputy governor at the Riksbank, told the Financial Times.

As the FT adds, there are considerable questions for Sweden’s central bank to answer about how a digital currency would work. Would individuals have an account at the Riksbank? Would transactions be traceable, unlike with cash? Would emoney earn interest? Ms Skingsley said: “Personally I would like to design it in a way that is most like notes and coins.” That would mean no interest would be paid on it. But she added that the state had no interest in helping illegal activity, suggesting some form of traceability.

Skingsley also said that the Riksbank would need to consider financial stability issues like whether it would or should compete with commercial banks’ deposit base. The central banker said she was concerned that in times of financial instability citizens could transfer money to a state-backed electronic system, potentially increasing instability.

The type of technology to be used in the digital currency is up for grabs, according to Ms Skingsley. Much attention has been placed on blockchain, a complex set of algorithms that allows digital currencies to be traded and verified over a network of computers without a central ledger. Four of the world’s biggest banks recently clubbed together to develop their own form of digital cash.

 

Ms Skingsley said: “I’m indifferent if people want to use our product or another way of paying if they think it fulfils the basic demands we have for money.”

Skingsley said the Riksbank would need to look at a number of issues, including technical, legal, practical and security matters and would decide on an e-currency within the next two years. We are confident that at the end of the two year "evaluation" period, the central bank will proceed with demonetizing physical cash, and become the world's first fully-digital "cash" society, with other developed nations soon to follow.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Countrybunkererd's picture

when they tell you your gold is worth 20 credits, what will you do??

localsavage's picture

And they will all be sitting there crying when they get hacked and have no money, until the bank sorts it out...at their leisure of course.

Pinto Currency's picture

Given Sweden's immense success with its Muslim immigration plan, the central planners are doubling-down.

Now watch our next trick.

TahoeBilly2012's picture

If San Francisco was a Country...anything to be top the hipster heap. Free anal probes are next.

TeamDepends's picture

Eirik Marx-Leninsson is going to be paid for his left-wing effluvium posts in Rectal Digits.

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) TeamDepends Nov 17, 2016 7:07 PM

mmmmm... rectums

Lore's picture

To hell with "Google Plus."

Back on topic: Speaking from experience (used to work there and know people there), Swedes are the sheeple's sheeple, hopelessly brainwashed and domesticated. If any nation can be convinced to waltz into an abbatoir, it's the Swedes. 

Chris Dakota's picture
Chris Dakota (not verified) Pinto Currency Nov 17, 2016 6:01 PM

Sweden lost cause, brainwashed by https://i.ytimg.com/vi/8ERmOpZrKtw/hqdefault.jpg

Paul Kersey's picture

Meanwhile, back here in the good old USA, Wells Fargo now has to have a manager approve my monthly deposits, which, by the way, are checks and not cash, before it can be credited to my checking account.  Chase Bank does not allow cash deposits made by non-account holders.  Sweden is just the beginning.  

Perimetr's picture

Sometimes a gigantic solar flare that destroys the grid

doesnt' seem like such a bad thing after all.

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) Perimetr Nov 17, 2016 6:32 PM

You peoples do not KNOW~!

This is SATOSHI blessing in burka disguise.

Because now teh battle is between STATIST DIGITAL FIAT and BITCOIN. Love it when muh enemy just shoots themselves instead.

Citxmech's picture

Doesn't matter how many "Quatloos" they say an ounce of gold is worth - as long as it can be used for transaction involving real property, its value is intact.

Lore's picture

@ Draybin: Did you not read the article? The centrist control freaks will not suffer cryptocurrency outside their control.  They'll either hijack it or devise their own and legislate it.  This is the first time that I've seen it eyed explicitly by the psychopaths, but it was inevitable. 

kralizec's picture

There's your new currency Sweden...heads.

Luc X. Ifer's picture

The most succesful experiment of the cultural-marxist neo-fascists, total anihilation of a strong euro-caucasion enclave which managed to reach a dangerous level of wellbeing for its native citizens thus treatening by the power of example the globalist aristocracy. Now, the final enslaving hit deivered.  

Lore's picture

Naw. Sweden was always something of a brainwashed socialist-collectivist cultural backwater. The real enemy is still the headstrong native Germans: gotta destroy those people and make 'em less, you know, GERMAN. 

Countrybunkererd's picture

amen brother.  REMEMBER the usernames, they may be your ONLY hope going forward.  If that needs explained you are a moron.

Countrybunkererd's picture

VIVE LE RESISTANCE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Countrybunkererd's picture

phonetically...

veeve lee resistoncee... you never, NEVER, know.

Ignatius's picture

The revolution is coming from ABOVE, not below.

One does well to think why they constantly seek to change our normalized patterns.

Countrybunkererd's picture

hitlery, i swear, if you aren't my neighbor... you are certainly one of my bestessstesssstesst friends/allies

Hitlery_4_Dictator's picture

That's how we do it down it Dixie. Like minds, like minds. We can overcome. 

Countrybunkererd's picture

persnally i will say F.U.  I don't need your toilet paper.  I may regret it financially, but i will reap rewards that CANNOT BE COUNTED on the side of what is moral and correct.

 

Raffie's picture

When there is a power outage, digital currencies small flaw is revealed.

It is what they are hungry to do. Gotta stop crime at all cost says the criminal gooberments.

Kaiser Sousa's picture

”Gold does not accrue interest…”, and sitting on a stack of physical is still a risk against the other things you could have been doing with that capital.”   

remember the words of this moronic mother fucker in the days that lay ahead…

and remember all of his "trader" pals that concurred and cheered his stupidity...

there r only 2 forms of REAL Money...Physical Gold & Silver.

assholes.

Raffie's picture

Very true.

Keep stacking if you can afford it.

An remember to buy lead to protect your gold and silver.

LawsofPhysics's picture

You say "what gold?"

 

For 6000+ years peer-to-peer trading has utilized many things, gold is among one of them...

Wile-E-Coyote's picture

These dumb cunts don't realise people will find a way...........barter or a new currency.

Bobbyrib's picture

Step One: Laugh in the face of the bureaucrat stating such ridiculousness.

Step Two: Deny existence of gold.

I think you need to research shadow economies.

Holy hand grenade of Antioch's picture
Holy hand grenade of Antioch (not verified) Nov 17, 2016 5:48 PM

Clanence Beeks is unimpressed

BennyBoy's picture

 

....aaaaaand it's gone!

Pumpkin's picture

This is when the drug cartels step in.

Ecclesia Militans's picture

Grats on your decision to surrender to the machine, Switzerland.

As for me, I have an M14 and enough 7.62x51 to take care of any blue helmets I ever see in my neck of the woods.

FX223's picture

I hear that a microwave oven rigged to run with the door open and pointed toward the sky is possibly helpful with problem number 2...those pesky drones.

At your own risk and you didn't hear that from me.

 

Keep stacking and stashing friends!

Cluster_Frak's picture

I hear Sweden is overflowing with carpet bangers as well.

HRH of Aquitaine's picture
HRH of Aquitaine (not verified) Cluster_Frak Nov 17, 2016 5:54 PM

I am guessing if you own a pest control business everything looks good! Can you imagine the bed bug infestations and roaches in the gimmigrant housing? It has to be out of control. Which is saying a lot considering that six months out of the year it is freezing.

Wow72's picture

Can I move to another planet? this one has lost its mind. Speak up now or forever hold your peace.

HRH of Aquitaine's picture
HRH of Aquitaine (not verified) Wow72 Nov 17, 2016 5:55 PM

Scotty, now would be a good time to beam me up!

Wow72's picture

"Certainly nothing close to intelligence down here captain?"

Going cashless proves we have scum at the helm.  There will be no doubt if we go cashless, it goes against everything this country USED to stand for, ITS MORE A DISGRACE with each passing day.  The ultimate failure of humans to govern themselves rightly................. CASHLESS.  We can never have the truth cause scum rules.

bowie28's picture

I'm thinking this would be a line in the sand for the conservative/libertarian minded types in US.  Hoping at least.  

TeaClipper's picture

Think Generation Snowflake, and be very afraid

Mustafa Kemal's picture

"Think Generation Snowflake, and be very afraid"

Yes, they will help drive towards cashless

bowie28's picture

I consider your comment a micro-aggression and will be reporting you to the Tylers as soon as I stop hyperventilating.  First I need an hour in my safe space with a puppy and some coloring books but after that you better watch out!!

RaceToTheBottom's picture

Deficit spending republicans and Democrats have more to do with it that snowflakes.

This is being driven by the need for negative interest rates and not safe rooms.

What is Trumps plan for a balanced budget?  What is any president's plan for a 0 deficit world???

Implied Violins's picture

I'll trade five 22LR for a can of beans.

Pumpkin's picture

Are squirels good with beans?