Digital currency – cashless society – Chinese social credit system – Game over
Introduction of central bank digital currencies
CBDCs are digital currencies issued and backed by a state’s central bank. They are different from cryptocurrencies such as Bitcoin, which are private, unregulated digital currencies.
At present, money is usually used in the form of cash (notes and coins) or electronically as a bank deposit which is then used for transactions. The BoE already provides a form of ‘wholesale’ CBDC to commercial banks and some other financial institutions (known as reserves) through the BoE’s real-time gross settlement system. The BoE/Treasury taskforce was established in April 2021 to explore the possibility of providing a ‘retail’ CBDC which could be used by individuals and businesses. This would be a digital form of money to complement, but not replace, BoE-issued notes and coins. The BoE has said that if a UK CBDC were to be issued it would be in denominations of pound sterling and that “£10 of a UK digital currency would always be worth the same as a £10 note”. The CBDC could be used for transactions without needing a commercial bank as an intermediary.
The end of cash – a cashless society
In Sweden, technology is close to making cash a thing of the past.
Sweden has been at the forefront of banking innovation for a long time. The country’s first automatic cash machine was inaugurated in July 1967, only a week after the world’s very first one was opened in London. And the development and simplification of payments has evolved greatly ever since. Now, Sweden is leading the way towards the cashless society.
Living a cashless life
Cashless payments very much go hand in hand with the Swedish lifestyle.
Swish’s popularity can partly be attributed to Swedes’ fondness for splitting the bill in bars and restaurants. Often, one person pays and the rest swish their share.
According to Ella Johansson, professor in Ethnology at Uppsala University, this has much to do with the relation between friendships and resources:
‘Swedes see exchange of money and debt as a threat to friendship. In other cultures, like Italy for example, people would fight over being the one to pay the bill for the sake of keeping up the friendly relations.’
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