Sweden and Norway are reevaluating their plans for cashless societies following concerns over the vulnerability of fully digital payment systems to Russian security threats. The Nordic countries had made significant progress in adopting digital payments, but the recent rise in cross-border hybrid warfare and cyber-attacks has prompted a rethink.
A combination of good internet coverage, high digital literacy rates, and growing fintech industries had put Sweden on track to become cashless by 2025. However, Russia’s invasion of Ukraine in 2022 has led to a reassessment. The Swedish government is now advising people to use cash regularly and keep a week’s supply as part of its defence strategy.
Norway has also tightened border controls with Russia and enacted legislation requiring retailers to accept cash payments from October 1st. The country’s justice ministry recommends keeping some cash on hand due to the vulnerabilities of digital payment solutions to cyber-attacks.
Experts warn that prolonged power cuts, system failures, or digital attacks could leave cash as a vital alternative. Max Brimberg, a researcher at Sweden’s central bank, notes that cash fills a specific role in the payment system and is issued by the state. The central bank is exploring the idea of an “e-krona” to act as a digital complement to cash.
While some experts argue that Ukraine’s experience with digital systems has been beneficial, others highlight the need for evidence on whether cash is better than digital payments in modern threats. The reevaluation of cashless societies underscores the importance of preparedness and flexibility in the face of emerging security threats.
Source: https://www.theguardian.com/world/2024/oct/30/sweden-and-norway-rethink-cashless-society-plans-over-russia-security-fears