It is not the first year that Sweden has been building an economy in which there will be no place for cash. I first visited Sweden five years ago, and even then it was a big problem to stick paper money somewhere. Cash cannot be used to pay for public transport, a museum ticket, or a restaurant bill. In contrast to our cafes, which until the very last fight back from paying with a card, motivating by "a suddenly broken terminal", in Swedish cafes and restaurants there are signs everywhere: "Sorry, we do not accept cash."
A curious story that happened in one of the Stockholm banks was even connected with the complete absence of cash. In response to the robber's demand to put the money in the sack, the manager only threw up his hands in confusion: there was just no cash!
Why are there banks and restaurants when even beggars in Sweden are armed with terminals or special applications!
The tendency to switch to non-cash has accelerated so much that in the spring of 2016, the Swedish Central Bank tried to slow down the process by proposing to oblige all banks in the country to make cash transactions, since non-cash payments "are developing too quickly."
But it seems that in this difficult battle, the non-cash supporters managed to win, not least thanks to the coronavirus. Recently it became known that Sweden may become the first country in which there will be no cash at all. The Swedes are trying to solve this issue at the legislative level amid a pandemic, which further minimizes contacts with cash. Experts never tire of reminding: in order to protect your health as much as possible, it is better to use contactless payments.
Pros of cashless ...
The supporters of total cashless explain that cash is very inconvenient. They need to be stored, guarded, transported, counted, protected from counterfeiting, replaced by worn bills, etc.
There are even more serious arguments: while the largest denominations of banknotes settle in the shadow business, the smallest ones are simply thrown into the trash! In the United States, it has been calculated that the citizens of the country are quite unceremoniously handling coins of 1 and 5 cents, throwing them away for a total of almost 62 million dollars a year. And this despite the fact that the production of a coin of 1 cent costs 1.8 cents, and a 5-cent coin costs 9.4 cents.
Cashless payments also reduce the number of street robberies. It's empty in the pockets of passers-by, empty in the cash desks of cafes and street stalls, even in banks, as mentioned above, are often empty. So there is simply no one to rob.
The move to digitalizing money makes money laundering or tax evasion much more difficult. Lack of cash automatically leads to a lack of "envelope" salaries, which every Ukrainian government is struggling with unsuccessfully. That is, there is a direct relationship: the lower the share of cash, the lower the shadow employment.
The abandonment of cash will lead to the fact that the money that banks lost by giving cash to customers will now remain in financial institutions, and this will allow them to issue more affordable loans.
In the era of coronavirus and coronavirus, paper money received another negative karma: they are dirty!
... and its cons
In turn, the opponents of the paperless economy have their own weighty arguments. First, with total non-cash payment, everything will become too transparent: the state will be able to monitor everyone, and here there are great opportunities for abuse. Secondly, paper money and coins, unlike electronic ones, do not need electricity, the Internet, or a charged battery. And, finally, thirdly, the security system must be at the highest level, since cyberattacks can cause much more damage than a banal bank robbery.
“Certain preconditions are necessary to refuse cash, for example, an active struggle by the government against the shadow sector,” said TeleTrade analyst Sergei Rodler. - In the West, it has long been necessary to prove the origin of money during large purchases or simply crediting cash to your bank account. As a result, the population is forced to conduct transactions through intermediaries to avoid problems with freezing accounts. By the way, thanks to this, cryptocurrencies have become popular in a number of countries as a mechanism for legalizing gray income.
In addition, the expert says, one should not forget about negative interest rates in a number of countries, which deprive banks not only of their usual income from issuing loans, but also of the flow of funds to deposits. In such conditions, financial institutions only benefit from the forced abandonment of cash and a massive transition to non-cash.
“Many are actively resisting this process,” Rodler continues. - Among the fears are both the usual fears associated with data leakage and hacker attacks, and relatively new - distrust of the modern banking system. As the history of 2008 shows, banks can be extremely irresponsible, and the current parameters of monetary policy are quite capable of leading to a minus in deposit operations and the collapse of the banking system in the long run.