Half of Sweden’s retailers predict that the country will stop accepting cash by the end of 2025, the New York Times reported. Sveriges Riksbank, the central bank of the country, is already testing a digital currency called the e-krona. Could the declining usage of cash in Sweden lead to a potent market for crypto?
Preparing For a Cashless Society
Commercial banks, businesses, and individuals in Sweden are preparing for the creation of a completely cashless society within the next decade.
Stefan Ingves, the governor of Riksbank, said:
“When you are where we are, it would be wrong to sit back with our arms crossed, doing nothing, and then just take note of the fact that cash has disappeared. You can’t turn back time, but you do have to find a way to deal with change.”
The country and its government are well aware that cash is disappearing from society and the trend is irreversible. The inefficiency of cash has led the majority of the businesses and individuals in the region to switch to digital alternatives.
A few thousand people went as far as to implant microchips in their hands to pay for food and transportation with a gesture.
The declining usage of cash in Sweden represents a positive trend that the government has encouraged for many years. But, local authorities did not expect the general population to move on from cash to more practical alternatives at such a rapid rate.
Mats Dillén, the head of a Swedish Parliament committee, told the New York Times that the disappearance of cash from the society will inevitably cause major implications for the economy and the country has to be ready for what comes next.
“We need to pause and think about whether this is good or bad, and not just sit back and let it happen If cash disappears, that would be a big change, with major implications for society and the economy.”
Countries in Asia including Japan, South Korea, and China are undergoing a similar trend. China, in particular, has seen a surge in the usage of digital payment networks as a growing number of individuals have started to rely on mobile applications like AliPay, which is now valued at over $150 billion, to pay for necessities and receive monthly compensation from companies.
Japan and South Korea are Examples
The declining usage of cash in Japan and South Korea has naturally translated to an increase in demand for decentralized currencies like Bitcoin and Ethereum.
The two countries became the second and third largest cryptocurrency markets in the world behind the U.S., with large-scale cryptocurrency exchanges like Upbit, Bithumb, and bitFlyer dominating the global digital asset market.
Sweden remains a relatively small market for crypto, possibly because centralized payment networks are more efficient and practical for daily use. Merchant adoption remains as one of the weaknesses of decentralized currencies and centralized alternatives are still easier to utilize to deal with both offline and online merchants.
As cryptocurrency secures mainstream awareness and eventually adoption, Sweden could become a prime market for cryptocurrency users and investors, if supported by the government and favorable regulations.
Featured image from Shutterstock.