ADVERTISEMENTA false narrative spreading online claims that Norway and Sweden are doing away with e-money and are returning to a fully cash-based society.
For example, one post circulating on social media says the countries are now going back to paying in cash because they’ve supposedly realised that it’s the most secure payment method, as digital accounts allow the authorities to block your transactions.
Another popular post says that Sweden is going back to cash because digital payments are potentially a threat to national security.
However, these claims aren’t accurate.
They appear to have their origins in news reports over the past few months that both countries are putting the brakes on their plans to become cashless societies, apparently over fears that fully digital payment systems could leave their financial and state institutions vulnerable to Russian cyber attacks.
For example, The Guardian recently reported that despite the Nordic countries’ ambitions to reduce their reliance on cash, they are now starting to see electronic banking as a potential threat to national security.
An image or link to this report is often shared by social media users alongside a claim that the countries are getting rid of e-money altogether.
As things stand, Norway and Sweden have the lowest amount of cash in circulation as a percentage of GDP in the world, according to recent figures from Sveriges Riksbank, the central bank in Stockholm.
Fellow Nordic country Denmark also ranks quite low, as does the UK, while the eurozone as a whole still has significantly more cash in circulation.
But now, Sweden is encouraging citizens to use cash regularly through a variety of different measures.
Over the past few months, the defence ministry released a brochure entitled “If Crisis of War Comes” in which it advised people to keep a week’s supply of cash at home to remain prepared.
Sveriges Riksbank also said that the country needs to make sure that no one is excluded and that everyone is able to pay in the event of a large-scale crisis or war.
Norway meanwhile recently brought in legislation that fines retailers if they don’t accept cash, and also advised people to keep some cash on hand in case digital payment systems are attacked.
Nevertheless, Sveriges Riksbank told EuroVerify it’s not abandoning digital payments, and that it’s continuing with its plans to bring in an “e-krona” — a digital version of Sweden’s national currency.
Norges Bank, Norway’s central lender, also fully denied the claims that the country wants to move away from an electronic payment system and back to cash.
ADVERTISEMENT“Increased use of electronic payment methods has brought great benefits to society as a whole, banks, and their customers,” a spokesperson for the central bank said. “However, there is still a need for cash. Cash is not an end in itself, but has properties and functions that other payment methods and instruments do not have, and which are important to ensure an efficient and secure payment system.”
There’s no evidence that either country is trying to phase out e-money and return to a 100% cash-based society.
The misleading narrative online appears to feed into fears of digital currencies, in particular the digital euro envisaged by the European Central Bank (ECB).
Opponents of the digital euro say it could damage privacy, financial control and security, and even fully supplant cash.
ADVERTISEMENTFor example, they say that every transaction could be monitored by central authorities, leading to financial surveillance, and that the government would have more control over the currency, opening up the possibility of currency manipulation.
It’s also been suggested that the elderly or those in rural areas could lose out, as they wouldn’t have the same access to digital services as those in more urban areas.
However, the ECB and its president, Christine Lagarde, have repeatedly said that a digital euro would complement cash, not replace it, and that it would be safe, make payments more efficient, and be easy for all to use.
“The use of cash to make payments is declining and the shift towards online shopping and digital payments is accelerating,” the ECB says. “The digital euro would be an electronic form of cash for the digitalised world. It would give consumers the option to use central bank money in a digital format, complementing banknotes and coins.”
ADVERTISEMENT“Like cash, the digital euro would be risk-free, widely accessible, user-friendly and free for basic use,” it continues. “Moreover, the digital euro would strengthen the strategic autonomy and monetary sovereignty of the euro area by boosting the efficiency of the European payments ecosystem as a whole, fostering innovation and increasing its resilience to potential cyberattacks or technical disruptions, such as power outages.”