By Nomi Prins, Editor, Inside Wall Street with Nomi Prins
“We don’t take credit cards,” the salon owner told me. “We only take cash or Swish.”
I was surprised by the cash part.
I’d been in Sweden for a week, and I hadn’t seen cash anywhere. “Cash free” signs, like the one below, were everywhere…
A cash-free business in Old Town Stockholm
The Swedish version gives you the option to pay by card or Swish
I asked the salon owner if he knew where to find a cash machine. He didn’t.
And I couldn’t use Swish – the most popular payment app in Sweden – because you need an account with one of the big banks to use it.
As you know, I’m always traveling. Because what you know on paper pales in comparison to what you can learn by hopping in a plane.
That’s why I flew 5,518 miles from Los Angeles to Stockholm.
I was invited to a private set of meetings on tech and artificial intelligence (AI) in Sweden.
And while I was there, I got a glimpse of what it really means to live in a cashless society.
Which brings me to why I’m telling you this today.
In the U.S., we’ve already seen the first steps toward an all-digital dollar.
The Federal Reserve laid the groundwork for it in July, when it launched its FedNow payments system ahead of schedule.
As regular readers know, there’s a dark side to this.
But if you understand the ramifications of a cashless society, you can take steps to shield your wealth from this unprecedented power grab…
And even grow wealthier along the way. Let me explain.
Sweden is an almost completely cashless society. That means most people don’t carry cash, and most banks don’t engage in cash transactions anymore.
I learned that firsthand when I tried to find a cash machine in the heart of downtown Stockholm. You can’t.
And when I asked around stores and shops where I could find one, no one could say exactly.
At the entrance to Stockholm’s Gamla Stan (Old Town)
Sweden is one of the most innovative countries in the world.
It gave us Skype and Spotify. It’s in the process of building the world’s greenest battery technology. And it has been a global pioneer in cashless payments.
In 2012, a private company called Getswish AB launched the Swish payments app. Swedes use it to make payments between each other, with businesses, in church, and even to the homeless.
And it has had an immense ascent in the past few years.
Swish had 6 million users in 2019. Today, about 8.9 million Swedes use it. Of these, about 8.6 million accounts are owned by private individuals and 303,500 are business accounts.
The average number of Swish transactions per user is about 10 per month. And the average value of each is about 500 Swedish kronor, or $50.
To put that in perspective, Sweden has a population of 10.6 million people. That means more than 81% of the population is using one single payment app.
For comparison, the most-used payment app in the U.S. is Apple Pay. It launched in 2014, and it has 45 million users.
There are 334 million people in the United States. That means 13.5% of the U.S. population uses Apple Pay.
There are other payment apps in the U.S. as well, such as Venmo, PayPal, Zelle, and Cash App.
But Swish wins in terms of one-app dominance.
How did Swish get so popular? That’s the catch…
Swish is a cooperation with Sweden’s largest banks: Danske Bank, Handelsbanken, Länsförsäkringar, Nordea, SEB, and Swedbank, and Sparbankerna.
You can only access the app if you bank with the big banks that own it.
On the one hand, Swish makes payment transactions quick and easy. The wireless tap, pay-and-go process is simple.
In fact, Swedes and other Europeans were using that technology years before it became prevalent in the U.S.
Plus, no one can take your cash from you – physically anyway – in a robbery.
But as you already know if you’re a regular reader, there are drawbacks to one corporate entity having so much control over people’s financial data and transactions.
It gives the government the power to track what you’re doing with your money at all times, among other risks.
The Slippery Slope to CBDCs
Now, you might think a cashless society is too far away in the U.S. to be concerned. But the steps to becoming a cashless society unfolded quickly in Sweden since Swish began.
Four years ago, Sweden’s Central Bank – the Riksbank – argued that going completely cashless could be risky.
Then, in 2019, the majority of local Swedish bank branches stopped letting people extract or deposit cash into the bank.
By late 2022, cash transactions for business payments dropped to only 8% – down from 18% five years earlier. Today, only 1% of payments are made with cash.
Sweden is forecast to become 100% cashless by 2024.
And it’s not the only country pushing a cashless agenda. So are Norway, Finland, China, New Zealand, the U.K., and Brazil.
The U.S. is following that path, too.
The Fed started laying the groundwork for a cashless society when it launched FedNow this summer. And here’s why that’s a big deal…
As we’ve warned, going cashless is a necessary first step toward a central bank digital currency (CBDC).
We’ve talked about how the Fed has denied that FedNow is a precursor to a CBDC. But central bank denial doesn’t mean much.
We’re seeing that in Sweden.
Remember, only four years ago, the Riksbank said going cashless was risky. But now, it’s doing an about-face.
People aren’t using cash anyway, it says. And that’s a reason to consider issuing an e-krona – or CBDC. From its website:
As cash is used less and less, there is a risk that the public will, in future, no longer have access to, or be able to pay with, state-issued money. The Riksbank is therefore investigating the possibility of issuing a so-called e-krona – digital central bank money (or CBDC).
We could see more banks or companies join forces to form a FedApp version of Swish that everyone has to download.
In the same way, FedNow is part of a slippery slope to a digital dollar. It provides the first step to having a platform that connects all the big banks and companies using it.
And once you’re part of that platform, your relationship with your money changes. Your financial data, security, privacy, and control are at risk.
It won’t happen tomorrow. But if Sweden is anything to go by, once it starts, it happens quickly. So I want you to be prepared.
See, the last three times we saw an overhaul of our money as big as this one, it created some of the biggest moneymaking opportunities in history.
Folks who were able to connect the dots ahead of time could’ve seen gains as high as 5,200% – even while most Americans were blindsided.
And I believe the coming overhaul will be no different.
To learn more, and get my playbook for protecting and growing your wealth in this historic shift, click here.
Editor, Inside Wall Street with Nomi Prins