The New Normal Should Be Cashless
“Around the world, central banks and economic
policymakers have been unwilling to remove (or at least lower substantially)
the effective lower bound (ELB) on nominal interest rates created by the
existence of cash or currency. As a financial instrument that pays a zero
nominal interest rate, cash sets a floor for other financial instruments that
do, in principle, have freely variable nominal interest rates. Owing to the
“carry costs of currency” (the cost of storage, insurance, and so on), the ELB
is probably around -0.75 basis points – a level achieved by the policy rates in
Denmark and Switzerland.”
High internet use and state support help countries
ditch cash
Will Sweden create the first cashless society?
“Sweden is widely regarded as the most cashless
society on the planet. Most of the country’s bank branches have stopped
handling cash; many shops, museums and restaurants now only accept plastic or
mobile payments. But there’s a downside, since many people, in particular the
elderly, don’t have access to the digital society.”