Is Sweden poised to become the world’s first cashless society?
Cash usage is dropping rapidly in Sweden, now making up just 13% of all national transactions, according to the country’s central bank, the Riksbanken. Could Sweden become the world’s first “cashless society”? Researchers at The Royal Institute of Technology in Stockholm think it could – and much faster than you’re probably thinking: within five years!
It’s been a great year for cashless payment providers Visa and Mastercard’s share prices!
SOURCE: Yahoo Finance
Sweden’s journey away from cash has been swift. Between 2012 and 2014, the number of notes and coins in circulation dropped by 30%, and it has more-than halved over the past decade. This puts Sweden out in front of almost every other country, where cash still rules supreme: there are currently $500 billion banknotes and trillions of coins in circulation worldwide.
While the Royal Institute of Technology thinks five years will see cash go extinct in Sweden, the Riksbanken is making a slightly more cautious forecast. Cecilia Skingsley, the central bank’s deputy governor, suggests it could be just over a decade away: “If you extrapolate current trends, the last note will have been handed back to the Riksbank by 2030.”
Sweden, whose central bank has even considered releasing the world’s first central bank-backed cryptocurrency in response to the diminishing popularity of cash, is certainly out ahead of the crowd. But the world can learn from watching how the situation plays out – because technology has changed the way finance works, and the rest of the world is not on a different journey from Sweden – they’re just some way behind it.
Dominion holds Mastercard, Visa, and PayPal in its Global Trends Ecommerce Fund.
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