Nordic nations, known for their early embrace of digital payments, are now reconsidering their reliance on electronic banking due to national security concerns. Back in 2018, a former deputy governor of Sweden's central bank anticipated that the country would be nearly cashless by 2025. Fast forward to today, and that forecast is largely accurate, with only 10% of transactions involving cash. Cards are the dominant payment method, closely followed by Swish, a mobile payment system introduced by six banks in 2012, which has become widespread. Other mobile payment services are also rapidly expanding.
According to a recent report from the central bank, Sweden and Norway have the lowest cash circulation relative to GDP globally. However, with ongoing conflicts in Europe, instability in the US, and the looming threat of Russian cyberattacks, the cashless ideal is losing its appeal. The situation is considered so critical that authorities are urging citizens to maintain and use cash as a civil defense measure. In November, the defense ministry distributed a brochure titled "If Crisis or War Comes" to every household, advising people to regularly use cash and keep at least a week's worth in various denominations to enhance preparedness.
The central bank's report emphasizes the need to bolster readiness and prevent exclusion, ensuring everyone can make payments even during crises or wars. While efficiency has been the focus for years, safety and accessibility are now equally important. In December, the government released an inquiry suggesting that certain public and private entities should be mandated to accept cash, a recommendation the central bank supports.
As cash usage declines, the central bank had been exploring a digital currency, the "e-krona," but this project was halted a couple of years ago. The bank is now observing global trends in digital currencies. Sweden isn't alone in re-evaluating its cashless trajectory. Last year, Norway, which has a popular payment system similar to Swish called Vipps MobilePay, enacted laws penalizing retailers who refuse cash. The government also advised citizens to keep cash on hand due to the susceptibility of digital payments to cyber threats.
Norway's former minister for justice and emergencies, Emilie Mehl, highlighted the issue: "If cash isn't used or accepted, it won't be a viable emergency option when a crisis hits." In the end, despite their push towards cashless societies, these Nordic countries are still relying on cash for emergency preparedness.