April 9, 2018

...AND CHEAPER...:

How Sweden and the UK are leading the global shift towards a cashless economy (GEORGE EATON, 4/03/18, New Statesman)

The idea of a cashless economy can appear utopian, the kind of "blue-sky" policy beloved of Cameron's erstwhile adviser Steve Hilton. Yet in Sweden this apparent fantasy is close to becoming a reality. Cash transactions account for only 1.4 per cent of the value of all payments and the country is forecast to become cashless by 2030. Market traders, churches and homeless magazine vendors all accept card and phone payments. More than 900 of Sweden's 1,600 bank branches no longer take cash deposits. The country's Riksbank, the world's oldest central bank, is considering launching a national cryptocurrency: the e-krona (inflation-ravaged Venezuela recently created the oil-backed petro).

Even without government support, the UK has become one of the world's most cashless societies: cash accounts for only 3.9 per cent of all payments by value (compared to 10.7 per cent in the eurozone and 8.1 per cent in the US). For Korski, this is an unambiguously positive trend. One of the benefits of a cashless system, he told Cameron, is significantly reduced crime. In his 2016 book, The Curse of Cash, the Harvard economist Kenneth Rogoff disparages paper currency for aiding tax evasion, theft, corruption, terrorism, the drugs trade, human trafficking and the rest of a burgeoning black economy. Though a digital system creates new forms of crime, illegal activity becomes easier to trace.

Other benefits include higher economic productivity. "We're still struggling to measure the productivity gain of the near-disappearance of high street travel agents," Korski told me. In 2015, the Bank of England's chief economist, Andrew Haldane, argued that a cashless system would aid monetary policy by allowing negative interest rates to be imposed in times of economic stagnation. At present, if charged by banks for storing money, consumers are able to hoard cash.

Posted by at April 9, 2018 4:00 AM

  

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