Sweden to Become World’s First Cashless Country
A study by the KTH Royal Institute of Technology in Stockholm shows that Sweden is on track to become the world’s first cashless country.
A study by the KTH Royal Institute of Technology in Stockholm shows that Sweden is on track to become the world’s first cashless country. Today, five of six major banks in Sweden are already refusing to operate with cash. As a result, and considering the latest Tax Authority guidelines, Bitcoin has the potential to become a commonly used currency in Sweden.
People are becoming increasingly accustomed to using bank cards to pay even for the smallest purchases in Sweden with four out of five purchases made electronically. Now, with the increasing penetration of mobile and P2P payment systems, the necessity to use cash is quickly becoming obsolete.
Niklas Arvidsson, a researcher in industrial economics and management at KTH, stated:
"Cash is still an important means of payment in many countries' markets, but that no longer applies here in Sweden."
Moreover, the recent launch of mobile payment app Swish from several major Swedish and Danish banks is already revolutionizing the local banking system, says Arvidsson. As a result, several major banks are refusing to accept cash at all.
According to Arvidsson, there are less than 80 billion Swedish crowns in circulation (about EUR8 billion) and out of that amount, only somewhere between 40 and 60 percent is actually in regular circulation. To compare, there was around SEK106 billion in circulation only 6 years ago.
“We’re leading the world in cashless trading,” explains Bengt Nilervall from the Swedish Federation of Trade in an interview with The Guardian. “It’s safer this way and it saves us money, as handling money and transporting cash is costly. The Payment Card Industry [PCI] has taken many security measures to ensure that people are safe and we have good protection in place, so Swedes feel confident paying electronically.”
Bitcoin & Sweden
Considering the confidence displayed by the Swedes in electronic payments, bitcoin also has an opportunity to become a commonly used currency in Sweden, especially considering today’s ruling that Bitcoin exchange is exempt from VAT across Europe.
Back in May 2015, the country’s Tax Authority also published guidelines for Income Tax on bitcoin mining operations. This type of income would only be considered as economic activity, and thus subject to tax, if the miner “carries out the mining in a professional and cost efficient manner over a longer period with appropriate equipment,” or if “the activity is expected to create a surplus as measured over the full financial calculation period” and “the computing capacity can be expected to generate more than 25 bitcoins a year.” The only prohibited activity included the usage of bitcoin in waste and scrap metal transactions.
Moreover, as politics in Sweden also warm to bitcoin following the establishment of the BitcoinPartiet, the entry of foreign payment startups such as Stripe vying for market share, numerous Bitcoin-themed social events, as well as neighboring Denmark set to abolish the printing of cash by 2016, it will be exciting to watch which payment methods take off in Sweden and Scandinavia as a whole.