Allowing largely unaccountable corporations to track the overall financial activities and flow of resources among an entire population presents a power imbalance that will inevitably lead to problems. The anonymous ability to pay with cash — and soon hopefully a legitimately privacy-focused cryptocurrency — is an imperative function in maintaining stability in today’s world.
In February, the head of Sweden’s central bank warned that Sweden could soon face a situation where all payments were controlled by private sector banks.
The Riksbank governor, Stefan Ingves, called for new legislation to secure public control over the payments system, arguing that being able to make and receive payments is a “collective good” like defence, the courts, or public statistics.
“Most citizens would feel uncomfortable to surrender these social functions to private companies,” he said.
“It should be obvious that Sweden’s preparedness would be weakened if, in a serious crisis or war, we had not decided in advance how households and companies would pay for fuel, supplies and other necessities.”
The central bank governor’s remarks are helping to bring other concerns about a cash-free society into the mainstream, says Björn Eriksson, 72, a former national police commissioner and the leader of a group called the Cash Rebellion, or Kontantupproret.
In this sense, Sweden is far from its famous concept oflagom – “just the right amount” – but instead is “100% extreme”, Eriksson says, by investing so much faith in the banks. “This is a political question. We are leaving these decisions to four major banks who form a monopoly in Sweden.”
No system based on technology is invulnerable to glitches and fraud, says Mattias Skarec, 29, a digital security consultant. Yet Sweden is divided into two camps: the first says “we love the new technology”, while the other just can’t be bothered, Skarec says. “We are naive to think we can abandon cash completely and rely on technology instead.”
Skarec points to problems with card payments experienced by two Swedish banks just during the past year, and by Bank ID, the digital authorisation system that allows people to identify themselves for payment purposes using their phones.
Fraudsters have already learned to exploit the system’s idiosyncrasies to trick people out of large sums of money, even their pensions.
But an opinion poll this month revealed unease among Swedes, with almost seven out of 10 saying they wanted to keep the option to use cash, while just 25% wanted a completely cashless society. MPs from left and right expressed concerns at a recent parliamentary hearing. Parliament is conducting a cross-party review of central bank legislation that will also investigate the issues surrounding cash.
The Pirate Party – which made its name in Sweden for its opposition to state and private sector surveillance – welcomes a higher political profile for these issues.
Look at Ireland, Christian Engström says, where abortion is illegal. It is much easier for authorities to identify Irish women who have had an abortion if the state can track all digital financial transactions, he says. And while Sweden’s government might be relatively benign, a quick look at Europe suggests there is no guarantee how things might develop in the future.
“If you have control of the servers belonging to Visa or MasterCard, you have control of Sweden,” Engström says.
Also a relevant entry: Pitfalls of a Cashless Society.