Sweden Reconsiders Cashless Society Amid Security Concerns

Sweden, once a trailblazer in digital payments, now faces new challenges as it reassesses its transition to a cashless society. Predictions made by a former deputy governor of Sweden’s central bank in 2018 have largely materialised, with cash accounting for just 10% of all purchases. Card payments dominate, with the mobile payment app Swish, launched in 2012 by six banks, growing into a standard payment method nationwide. Yet, the promised utopia of a cashless society is being re-evaluated in light of shifting geopolitical and security dynamics.

According to the Swedish central bank’s latest payments report, Sweden and Norway register the lowest levels of cash circulation as a percentage of GDP in the world. However, concerns about national security—driven by war in Europe, uncertainties in the United States and fears of Russian hybrid attacks—have prompted Swedish authorities to champion a return to a more balanced approach. Citizens are now encouraged to keep a stock of cash on hand and utilise it regularly as part of strengthened civil defence measures.

In November, Sweden’s defence ministry distributed a brochure titled If Crisis or War Comes to every household, urging citizens to maintain at least a week’s supply of cash in multiple denominations. This move highlights the growing recognition of cash as a critical emergency resource. The central bank has emphasised the need for measures ensuring payment safety and accessibility under crisis conditions, stating that efficiency must now be balanced with security and inclusivity.

The Swedish government has drawn lessons from its Nordic neighbour, Norway, which last year implemented legislation mandating that some retailers must accept physical cash. Norway’s government has also advised citizens to maintain cash reserves, citing the vulnerability of digital payment systems to cyber-attacks. Norwegian officials have made clear that cash must remain a viable emergency solution in the event of a national crisis.

While Sweden’s central bank experimented for years with a state-backed digital currency called the “e-krona,” the project concluded unsuccessfully, shifting the bank’s focus towards monitoring global developments in digital currencies. This temporary retreat reflects a broader trend among Nordic nations as they reconsider the risks and resilience of a fully cash-free economy.

The world’s leading cashless economies are progressively acknowledging that cash retains a vital function, especially in emergency planning. Both Sweden and Norway now advocate for hybrid payment systems that integrate cutting-edge technology with the irreplaceable reliability of physical cash.