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Author Topic: Sweden Tries to Halt Its March to Total Cashlessness  (Read 37 times)
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June 12, 2018, 12:00:15 AM
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A key committee of Swedish lawmakers wants to force the country’s biggest banks to handle cash in an effort to halt the nation’s march toward complete cashlessness.

Parliament’s Riksbank committee, which is in the process of reviewing the central bank law, proposed making it mandatory for banks to offer cash withdrawals and handle daily receipts. The requirement would apply to banks that provide checking accounts and have more than 70 billion kronor ($8 billion) in deposits from the Swedish public, according to a report.

The lawmakers said there needs to be “reasonable access to those services in all of Sweden," and that 99 percent of Swedes should have a maximum distance of 25 kilometers (16 miles) to the nearest cash withdrawal. The requirement doesn’t state how banks should offer those services, and lenders can choose whether to use a third party, machines or over-the-counter services.

The move is a response to Sweden’s rapid transformation as it becomes one of the most cashless societies in the world. That’s led to concerns that some people are finding it increasingly difficult to cope without access to mobile phones or bank cards. There are also fears around what would happen if the digital payments systems suddenly crashed.


Swedes Now at Risk of Losing Access to Cash in Parts of Country

"We believe that the continued development of access to cash in society needs to take place in a controlled manner so that the public’s and society’s need for cash is fulfilled," the committee said in an op-ed in Dagens Nyheter.

Disappearing Cash
Amount of Swedish notes and coins in circulation has dropped to lowest level since 1990


Source: Statistics Sweden

The committee began looking at these issues amid worries that cash was disappearing too fast. A majority of bank branches in Sweden have stopped handling cash over the counter, and many shops and restaurants are also rejecting physical money. Still, a recent Riksbank study showed that the decline of cash is driven by the fact that Swedes prefer using electronic payments such as debit cards and mobile payments.

The Swedish Bankers’ Association said the plan would violate European Union laws on state aid and competition by forcing only a few banks to guarantee the supply of cash.

"To introduce a legal requirement where a few banks will be forced to manage cash supply in the country is legally very doubtful, as the same requirement isn’t placed on the other banks and other companies in the cash handling chain, such as retailers and cash-in-transit companies," Hans Lindberg, the association’s director general, said in a statement.

Costs Vary
The proposal will result in “significantly increased costs” of as much as 100 million kronor a year for banks and customers, according to the group. The report also fails to mention that Riksbank now only has one cash depot left after closing 23 facilities, which has hampered the private sector’s cash usage, the group said.

The report puts the total costs for the six affected banks at 8 million kronor to 15 million kronor a year.

While Financial Markets Minister Per Bolund in April also questioned the legality of forcing banks to handle cash, in an interview on Monday he said there was "strength" in the proposal since it’s backed by all the parties in parliament.

He declined to say whether the government would support the proposal, which will now be sent out on a consultation round.

Raising Ambitions
Riksbank Governor Stefan Ingves has expressed concerns that the lack of cash may become problematic in a crisis situation, and suggested new legislation to safeguard public governance of the payment system as well as introducing a digital currency. He has also suggested forcing banks to handle cash, a view now shared by the Riksbank committee.

"The large banks have a special responsibility for the access to cash in society," given that they are central as providers of payments and credit, the committee said. "It’s therefore not reasonable that they can completely renounce the responsibility to handle cash, especially against the background that it’s a legal means of payment."

The proposal means "raising the ambition level" somewhat compared with the current accessibility of cash in society, it said. If the requirements are not met, banks will face economic sanctions, whose size will depend on how large the bank is and on how much it contributes to access to cash, the committee said.

Cash handling company Loomis AB said the plan was “a step in the right direction.”

“The proposition aims to secure outflow of cash in society,” Patrik Andersson, chief executive officer at Loomis, said in an email. “We also want to see a proposal that all players must accept cash as well. It’s a legal means of payment and should be accepted by all. It’s like that in most countries, but not in Sweden.”

https://www.bloomberg.com/news/articles/2018-06-11/sweden-tries-to-halt-total-cashlessness-with-lawmaker-proposal

Nice to see an alternate perspective to the pro cashless society crowd. Interesting to see banks acknowledge some of the drawbacks many of us have suspected a cashless society might face. Would be curious to know how india's push towards a cashless economy is developing. I have not seen recent updates on it, which could mean it is not going well.

It is possible cashless societies are attempts to further centralize money and make all transactions electronic which would make it easier for a surveillance state to monitor and sell the data to the private sector, foreign governments or anyone who wanted the information. Do the drawbacks of cashless societies outweigh those facets of centralization? Who knows.

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June 12, 2018, 07:09:12 AM
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That is interesting news indeed. It seems someone in their government is still reticent on going cashless. I wonder why, since their corruption index is very low.

I am pro cashless since this is the best way to track frauds and stop corruption. We have been a cash-only society for some time now and that hasn't worked out very well.

On another note, I remember when traveling to Denmark a few years back and seeing people with wallets that do not hold any banknotes or coins, just cards. I think they should be at least 95% cashless by now. Bravo to them! Smiley
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June 12, 2018, 09:53:26 AM
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There are defintiely going to be drawbacks to a cashless world in which centralised payment services dominate. Essentially means that both corporations and governments can track exactly what you're spending, and there would be no privacy whatsoever.

It's nice to see that Sweden is actually recognising these problems, and taking a step back. Of course, there are no guarantees that anything is going to be done with it.

Obviously though, it's not something that applies to everything that is cashless per se. Bitcoin would still offer the same amount of financial independence and privacy as cash does, which is oftentimes a good thing rather than anything bad. Furthermore, when you see centralised payment networks crash (just like VISA doing so and ripping customers a while back), you recognise the value decentralised forms of payment (cash is obviously still based on fiat, but it doesn't need a "server" to be up and running in order to work).

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June 12, 2018, 10:31:28 AM
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Nice to see an alternate perspective to the pro cashless society crowd. Interesting to see banks acknowledge some of the drawbacks many of us have suspected a cashless society might face. Would be curious to know how india's push towards a cashless economy is developing. I have not seen recent updates on it, which could mean it is not going well.

It is possible cashless societies are attempts to further centralize money and make all transactions electronic which would make it easier for a surveillance state to monitor and sell the data to the private sector, foreign governments or anyone who wanted the information. Do the drawbacks of cashless societies outweigh those facets of centralization? Who knows.

Cashless policy is the way and the better everyone key into it, the better. In a country in which its almost impossible to eradicate corruption, the way out is to stop how people touch cash. You see government agents have excess amount of money than what they are entitle to but in their bank accounts they have ridiculous balance which could is not commensurate with their lifestyle. That is only possible because of the access to cash that they get in form of bribes to do the job that they are being paid for. Imagine cash is then eradicated it would mean that they would be forced to do the right thing and such policy needs to come as a national policy if the required objective is to be met. Aside that, the whole essence of crypto currency is to have a cashless economy considering the many disadvantages associated with cash.

However, that is not to say that the Swedish authority are wrong because in every policy there should be flexibility and its just normal for them to identify the unique nature of their environment and make some allowance for it which is what they have done. Not everybody have the same access to education to operate all cashless aiding tool which is why allowance is necessary and be encouraged.

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June 12, 2018, 10:53:12 AM
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I think they're still weighing if going cashless is mub better than fiat. Then again, we have almost a cashless society with credit cards and ebanking and whatnot. Then again, i think banks really are putting the pressure on swedish government. Of course they will be rendered useless once crypto currencies rise.

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June 12, 2018, 11:05:15 AM
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There are defintiely going to be drawbacks to a cashless world in which centralised payment services dominate. Essentially means that both corporations and governments can track exactly what you're spending, and there would be no privacy whatsoever.
Those who will be able to track your spending are not only limited to corporations and governments, any average joe with enough knowledge in crypto can also track it as well depriving one with privacy(if one declares his/her wallet address).
Cashless policy is the way and the better everyone key into it, the better. In a country in which its almost impossible to eradicate corruption, the way out is to stop how people touch cash.
Stopping people to touch cash will also not eradicate corruption because there are still loopholes that politicians can use to do the same thing with a cashless society. One of the ways to do it is by using mixer services in order to anonymize their transactions in a decentralized crypto.
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June 12, 2018, 11:26:00 AM
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It's actually a very interesting development. I have been following some discussions online about how people initially were praising how a cashless economy would benefit them in various ways, but when you make them aware of how they will lose practically all their privacy, they suddenly don't like a cashless economy anymore. It's very much the ignorance of people making them not see any risks, but what else can we expect from average joes?

I remember a case where a larger supermarket in my country was linking people's debit cards to their store tied bonus card, which they could then link to their Facebook account. While browsing through Facebook people were flooded with all sorts of ads very much related to what they bought previously in that supermarket. It's quite a scary thought, because that information can and very likely will land in the pockets of health insurers.

And remember this is only one example of the thousands that people will be exposing themselves to. It will eventually result in more discrimination, exclusion, poverty, debt, etc.

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