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Will the Swedish model of a cashless society spread around the world?

In Sweden, apps and plastic rule. The country is on the bleeding edge of the cashless society model and those on both sides of the fence are converging on the European country to voice their support and concerns. If it works the way it’s supposed to work, will other countries start adopting the concept?

Americans are already largely shifting towards electronic commerce as a preferred method of paying for just about everything. It has some major advantages in the financial sector but also represents tremendous threats.

With a cashless society, the theory is that crimes such as burglaries and robberies will decrease because of the difficulty of securing actual money. If everyone is using their smartphones and credit cards to buy things and aren’t carrying around cash, there are inherent risks to thieves. It isn’t just the inability to grab legal tender. In theory, they will have a more difficult time getting rid of their stolen goods.

It’s also more convenient in many cases, of course. Churches in Sweden have seen an increase in tithing by giving their members multiple ways of giving money rather than just passing around a basket.

For the financial sector, a cashless society represents more fees that can be collected and a reduced need to hold money that can be stolen. It is logistically more desirable because pumping money into ATMs and keeping at banks means physical transfers rather than just a few clicks on a keyboard.

In Sweden, the trend is already very clear.

There are distinct problems with going cashless. Reliance on technology means that there are massive potential vulnerabilities. It may be harder for an armed robber to get away with an individual’s cash, but cybercriminals are begging for the day when everyone is so reliant on electronic money that it becomes too difficult to track them. If nearly all commerce happens electronically, the ability for an organization to bring down portions of the economy goes up exponentially.

Then, there’s the Big Brother factor. Digital transactions are much easier for the government to track. It means making tax collection easier, placing those in financial distress at the mercy of the government if they have no way of surviving without giving access to all of their money to the government. This isn’t a problem for most, but those who have had difficulties with taxes, identity theft, or debt are aware of the advantages of cash over digital money.

Both systems are imperfect, but Sweden seems to be taking the boldest steps towards trying a cashless system. How the rest of the world proceeds could depend on their successes and failures.

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