Sweden was until now proudly leading the advance in the War On Cash, the neo – Maoist ruling elite had pushed the idea that a cashless society, with all financial activity moved to electronic media would protect citizens from crime and be more convenient. There was no mention when the idea was pitched by politicians and bankers that in a cashless society we would completely surrender control of our money to banks, and our privacy in financial matters to government security agencies. Yes, every electronic financial transaction is recorded, your spending habits are tracked, and while disreputable organisations like Google, Facebook and Twitter will sell that information to anybody who can afford to pay, governments can use it against you in many other ways.
In a surprise turnaround Sweden’s Riksbank this weekend has become the first central bank in the 21st century to take concrete measures to ensure that cash does not disappear as a means of payment from the financial system, in opposition to corporate efforts to force retail customers away from cash. To achieve that the Riksbank proposes, in a document published on its website, to mandate that all banks and financial institutions continue to offer cash services.
The policy initiative comes in response to a recent proposal suggestion by the Riksbank Committee that only the country’s six major banks should be obligated to continue offering cash services.
That prompted a reaction from Sweden’s competition watchdog, which argued that the plan would distort competition as it would affect only a few of the nation’s banks. In response, the Riksbank has opted to apply the rule to “all banks and other credit institutions that offer payment accounts.”
There was also a disagreement between the RiksbankCommittee (a political overseer,) and the central bank’s senior management over what deposit facilities should be offered. While the Committee recommended that banks should only be obliged to provide deposit facilities to businesses, the Riksbank believes it is important for banks to also offer deposit services to private citizens:
“This is a service that consumers can reasonably expect of credit institutions. There must also be symmetry between withdrawal and deposit facilities. In the Riksbank’s view, there is otherwise a risk that the possibilities for individuals to make deposits will decrease even further in the future. For most consumers, it would also be difficult to understand why they can withdraw cash from an account but not make deposits.”
For yearsnow, both the ultra progressive Swedish the government and the Riksbank management have been pushing for a “cashless society.” The Riksbank has over 1,000 articles posted on its website on the “cashless society“. The emphasis worked: between 2013 and 2017, the amount of cash in circulation dropped by 35%, earning Sweden a reputation as the world’s “most cashless nation”.
Many of Sweden’s bank branches had stopped handling cash altogether, but now will have to begin doing so again. Many of them are not happy about it arguing that access to cash should be the sole responsibility of the state and not private banks.
“To secure access to cash is a collective good that the state should reasonably be responsible for,” the Swedish Financial Supervisory Authority said. It’s an opinion that’s shared by ATM provider Bankomat, which argued that it should be the state’s responsibility to ensure that citizens have access to cash since the handing of notes and coins is such an important — and expensive — part of a country’s infrastructure.
Shops and restaurants, could also be affected by a suggestion that retail operations which provide public services, such as pharmacies, transport services, food shops and petrol stations, should also “be included in an obligation to accept cash.”
One likely result of this is that many people who struggle to navigate the digital system, or who don’t have credit cards, in particular the elderly, no longer have to fear finding themselves locked out of the country’s payment system.’ There is also that section of society known as ‘the underclass – and yes Sweden does have them despite government efforts to present the nation as a socialist utopia in which things like poverty, crime, prostitution and begging are unknown. Sweden’s parliament has also launched a review on the impact of going cashless too quickly as it excludes the financial needs of the elderly, children and tourists who rely on cash.
It is a dramatic u-turn for a country that not so long ago was further along the path toward eliminating cash than just about any other advanced economy. Sweden enlisted its citizens as largely willing guinea pigs in an economic experiment that was doomed from the start — negative interest rates. People quick on the uptake will have worked out in such a system we, the punters pay the bank to gamble with our hard earned. But a negative interest rate policy (NIRP) has its limits with consumers as long as cash remains an alternative because while you have to pay for the privilege of having money in the bank, stuffing it in a matress or under the floorboards is free. And that is the true explanation of the eagerness to eliminate cash. It was not for our protection or our convenience, but to make stealing from us easier for banks, financial services companies and governments.