Sweden Begins Planning Transition From Cash To Digital Currency

In the aftermath of the ECB halting production of the €500 banknote, and more recently, India phasing out its highest denomination bills instantly eliminating some 86% of the cash in circulation as increasingly more countries make a move toward a cash-free society, another central bank – the world’s oldest – has started planning its own transition away from paper cash.

Sweden’s Riksbank, which was the first central bank in the world to issue paper currency in the 1660s, is preparing to become a monetary pioneer yet again, and has launched a project to examine what a central bank-backed digital currency would look like and what challenges it would pose.

As Reuters writes, the RIksbank could become the first major central bank in the world to create its own virtual money as the use of cash declines, Deputy Governor Cecilia Skingsley said on Wednesday.

The central bank hopes to take a decision on whether to start issuing what it calls an ekrona in the next two years. What is perhaps more notable is that should the central bank launch a digital currency few would notice; the value of cash in circulation in Sweden has fallen to around 1.5% of GDP from 10% of GDP in 1950.

Sweden is already mostly a non-cash nation: just like Citi in Australia, local bank branches are moving away from cash handling while cash machines are scarce in much of the country. Some shops have stopped accepting cash payments altogether. The Riksbank, like other central banks, already provides electronic money through accounts to banks and clearing organisations. But it only provides central bank money to individuals through notes and coins.

Digital currency functions like payment cards, allowing users to make online transactions across borders instantaneously. It has been growing in popularity as more people use the internet to shop. The major difference between digital and paper currency is that every single transaction is logged, and the value of money can be remotely “adjusted”, making it impossible to use cash as an value-preserving alternative to negative interest rates. It is also the reason why central bankers loathe cash in a time of negative interest rates.

“Sweden is on the forefront of this. We don’t have any other countries to copy, since there is no other country that is so rapidly stopping using notes and coins as Sweden is,” said Skingsley, who gave a speech on the issue on Wednesday.

Defending the move to transition away from cash, the central banker told reporters that “there is a large number of people who for various reasons cannot, do not want to have or do not get access to the commercial banks’ payment methods.”  She did not explain, however, that the Swedish population would essentially have ceded full control of their “cash” to the central bank.

“We need to do the homework because it’s not an option for the public sector to stay on the sidelines and see the private sector cut off access to central bank money for individuals,” added Skingsley.

Meanwhile, the hyperbole continued: “this is as revolutionary as the paper note 300 years ago. What does it mean for monetary policy and financial stability? How do we design this: a rechargeable card, an app or another way?” Cecilia Skingsley, deputy governor at the Riksbank, told the Financial Times.

As the FT adds, there are considerable questions for Sweden’s central bank to answer about how a digital currency would work. Would individuals have an account at the Riksbank? Would transactions be traceable, unlike with cash? Would emoney earn interest? Ms Skingsley said: “Personally I would like to design it in a way that is most like notes and coins.” That would mean no interest would be paid on it. But she added that the state had no interest in helping illegal activity, suggesting some form of traceability.

Skingsley also said that the Riksbank would need to consider financial stability issues like whether it would or should compete with commercial banks’ deposit base. The central banker said she was concerned that in times of financial instability citizens could transfer money to a state-backed electronic system, potentially increasing instability.

The type of technology to be used in the digital currency is up for grabs, according to Ms Skingsley. Much attention has been placed on blockchain, a complex set of algorithms that allows digital currencies to be traded and verified over a network of computers without a central ledger. Four of the world’s biggest banks recently clubbed together to develop their own form of digital cash.

 

Ms Skingsley said: “I’m indifferent if people want to use our product or another way of paying if they think it fulfils the basic demands we have for money.”

Skingsley said the Riksbank would need to look at a number of issues, including technical, legal, practical and security matters and would decide on an e-currency within the next two years. We are confident that at the end of the two year “evaluation” period, the central bank will proceed with demonetizing physical cash, and become the world’s first fully-digital “cash” society, with other developed nations soon to follow.

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SWEDEN is asking its citizens to commit hara-kiri (ritual suicide)

And they are even providing the knives – disguised as a suicidal Muslim immigration policy – otherwise known as white genocide.

*Hara-kiri is ceremonial suicide by ripping open one’s own abdomen with a knife or sword, mainly practiced by the Japanese, after being disgraced, dishonoring one’s family or country, or being sentenced to death.

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A new propaganda campaign promoting the colonization of Sweden by Muslim invaders features a video called “Det Nya Landet” (the new country), made by the Swedish charity organization IM, who wants to redefine what it means to be Swedish by forcing native Swedes to change their culture, traditions and values in order to accommodate people who refuse to accommodate anyone else’s.

h/t Brenda

BREXIT set to spread across Europe: Italy, France, Netherlands, and Denmark ALL call for referendums

POLITICIANS across Europe have called for their own referendums in the wake of Britain’s historic decision to quit the EU.

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UK Express (h/t Maria J) “We entered the European Parliament to change many treaties. “The mere fact that a country like Great Britain even held a referendum on whether to leave the EU signals the failure of the European Union.”

Italy’s anti-establishment 5-Star movement has now officially called for a  on whether to keep the Euro. Buoyed by big gains in local elections, Luigi Di Maio, a vice president of the lower house of parliament, said: “We want a consultative referendum on the Euro.

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“The Euro as it is today does not work. We either have alternative currencies or a ‘Euro 2’.

The 5-Star movement has called for two different currencies in Europe, one for the rich northern countries another for southern nations.

While any such referendums on the EU or the Euro would be merely test public opinion because Italian law does not allow referendums to change international treaties, a victory would send a clear signal to the government, especially in the wake of Brexit.

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Brexit is a huge blow to Italian Prime Minister Matteo Renzi’s Democratic Party and was hailed by supporters of 5-Star as a possible springboard to Italian independence.

 as she declared her support for Brexit.

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She said: “I would have voted for Brexit. France has a thousand more reasons to leave than the UK because we have the euro and Schengen.

“This result shows the EU is decaying, there are cracks everywhere.”

Experts across the continent warned today that Brexit would lead to the entire break-up of Europe.

The leader of the far-right Danish People’s Party says Denmark should now follow Britain’s lead and hold a referendum on its membership.

Party leader Kristian Thulesen Dahls said if the Danish parliament cannot agree on reforms with the EU a referendum could give Denmark a new opportunity.

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He said: “If a majority in parliament for some reason will not be involved in this, why not ask the Danes in a referendum decide the case?”

If Denmark goes ahead, Irene Wennemo, state secretary to SWEDEN’S minister for employment, said the anti-EU sentiment could spread through Scandinavia and raise the possibility of a vote in Sweden.

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Eurosceptic feeling is also surging in the Netherlands, with two-thirds of voters rejecting a Ukraine-EU treaty on closer political and economic ties.

 declared the result the “beginning of the end” for the Dutch government and the EU.

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HERE are some of the candidates for referendums:

  • Greece‘s departure, or Grexit, was long coined before Brexit. While Greece might be seen as a likely contender, it’s close financial ties to the EU make a departure much more difficult. Greece currently owes €32 billion to the IMF and €20 billion to the European Central Bank.

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  • France is seen as the first in line for a so-called Frexit. The French National Front (FN) party, lead by the charismatic and anti-EU politician, Marie Le Pen, hailed the Brexit vote as win for nationalism and sovereignty across Europe. “Like a lot of French people, I’m very happy that the British people held on and made the right choice. What we thought was impossible yesterday has now become possible,” Le Pen Said. She [Le Pen] has vowed, if elected French President next year, an EU referendum for France will take place within six months. (See also: Frexit Referendum Possible If Le Pen Is Elected.)

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  • Italy might have the biggest support amongst voters when it comes to a potential exit from the EU. Hours after the Brexit result, Italy’s head of the Northern League, Matteo Salvini reiterated his stance that it was time for Italy to give the people a voice. “This vote was a slap in the face for all those who say that Europe is their own business and Italians don’t have to meddle with that,” Salvini said.

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  • The Northern League has an ally in the 5-star movement. Virginia Raggi, who was elected mayor of Rome, is a campaigner for the anti-establishment movement and has also called for an Italian referendum on its EU membership.