[lucozade]

Sweden is moving unusually rapidly to a cashless (or near cashless) society. A lot of countries are seeing big increases in the use of digital payments but generally not big decreases in the value of cash payments although that may well come eventually. In Sweden it's already happening.

Like most central banks, the Riksbank runs 2 credit risk free payment systems: one that supports commercial banks and another, cash, that supports both companies and the general public.

The central bank's relationship with commercial banks isn't really affected by this initiative. However, the thinking is that a credit risk free payment system for the general public is still valuable for the reality/perception of a stable financial system.

If cash (effectively) goes away then so does the second payment system. What the Riksbank are doing is looking at alternatives that have the payment system properties of cash but in a digital form.

As I understand it, they're looking at a couple of models. A digital cash equivalent i.e. mostly anonymous peer to peer. And an account balance based i.e. central banking accounts for joe public.

It's interesting work and, in my opinion, likely to be followed closely by other central banks as I'm sure they are predicting similar dynamics in the next 20-30 years.