Cashless Countries Rethink Switch Amid New Cyberthreats

Two of the planet’s most cashless societies are now reexamining their move from paper money.

As The Guardian reported Sunday (March 16), Sweden and Norway have the lowest amount of cash in circulation — in terms of percentage of gross domestic product (GDP) — out of any country in the world.

For example, just 10% of purchases in Sweden are made with cash, with alternative methods like the mobile payments system Swish growing in popularity.

But now, amid uncertainty in the U.S. and fear of Russian cyberattacks, authorities in those countries are encouraging their citizens to hold onto cash.

Norway, the report said, has floated legislation that says retailers can be fined for not accepting cash, while also recommending that citizens keep some cash on hand, arguing that digital payment solutions are vulnerable to cyberattacks.

“If no one pays with cash and no one accepts cash, cash will no longer be a real emergency solution once the crisis is upon us,” Emilie Mehl, Norway’s former justice and emergencies minister, told the Guardian.

“Measures need to be taken to strengthen preparedness and reduce exclusion so that everyone can pay, even in the event of crisis or war,” Sweden’s defense ministry said in a pamphlet issued in November.

For years, it says, efficiency had been the priority for payments, but now accessibility and safety have become “at least as important.”

Sweden’s central bank, the Guardian report added, had been working on its own digital currency – the “e-krona” – but is now focused on monitoring central bank digital currency (CBDC) projects around the world.

Meanwhile, digital currencies face an uncertain future in the U.S. As reported here last week, U.S. Rep. French Hill, R-Ark., chair of the House Financial Services Committee, favors legislation that would ban an American CBDC.

“Unlike stablecoins, which operate in a competitive market, a CBDC would concentrate financial power within the federal government, restrict consumer choice and undermine the innovation that has made U.S. financial markets the strongest in the world,” Hill said at a hearing on the currencies last week.

“A CBDC would also suppress competition, jeopardize financial privacy and weaken the role of the U.S. banking system.”

The ranking Democrat on the committee, California Rep. Maxine Waters, said such regulation would be “not only anti-innovation,” but also “anti-American as it helps China win the digital currency ‘space race’ and undermines the U.S. dollar as the world’s reserve currency.”