Nordic countries move towards a cashless society, Sweden continues CBDC experiments, Finnish scholars not optimistic

Sweden is already one of the most cashless societies in the world. According to statistics from the Swedish central bank, cash transactions make up only 1-2% of the overall economy. However, the country seems determined to push even further, as it embarks on a year-long trial of a CBDC project.

• Development Progress is Keeping Pace with the Bahamas
• Countries Have Mixed Attitudes Towards the Development of CBDC

CBDC Making Substantial Progress

It is understood that Riksbank has analyzed the demand for the e-krona, engaged in discussions with various countries to gather opinions on the e-krona, developed appropriate technical solutions, and launched a trial plan that will run until February 2021. This project started in 2017 and will take nearly 4 years to complete.

The Swedish central bank Riksbank stated that the blockchain-powered "e-krona" will promote digital payments and banking services nationwide, eliminating the need for credit cards or fiat currency. Daily transactions will shift to the blockchain, enhancing a secure and efficient payment system.

In addition to Sweden, the Central Bank of The Bahamas (CBOB) initiated a CBDC trial project named the "Sand Dollar Project" in December last year, and it is set to officially launch in the latter half of this year.

Finnish Economist Expresses Doubt

In recent years, many central banks worldwide have been exploring research and development of CBDC. The concept of "digitalizing fiat currency" seems to have become an inevitable national monetary policy. However, Finnish economist Aleksi Grym holds a different view, stating that CBDC will significantly reduce the "privacy" and "convenience" features that physical cash currently possesses.

In an article posted on his LinkedIn, Aleksi Grym mentioned that due to the inefficiency and poor scalability of blockchain technology, CBDC does not require the utilization of related technologies such as distributed ledgers.

Furthermore, compared to physical cash's instant transactions, low access barriers, and privacy, CBDC generally lacks concrete solutions for the aforementioned cash features. Aleksi Grym stated:

Most studies focus on the theoretical foundations and conceptual models of CBDC, with few able to explain in practical terms what CBDC would look like in daily life. The key lies in how to enable the public to use it as securely as cash and provide a similar level of privacy and immediacy as non-cash financial tools.

In reality, CBDC may still have flaws, but just as mobile payments have gradually become popular, the world is inevitably moving towards optimizing digital currencies and welcoming a cashless society.

Further Reading

• Cambodian Central Bank to Trial Digital Currency in July, with 11 Partner Banks Already
• Central Banks of England and Japan Collaborate to Accelerate Progress, with Over 18 Countries Having Digital Currency Plans

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