Whatever the advantages or disadvantages of central bank digital currency (CBDC), we aren’t going to get one anytime soon because we lack one of the crucial building blocks for a national digital currency that can deliver benefits to the new economy, and that is digital identity. If you want a case study, look at Sweden.
Where ABBA Leads, We Should Follow
Sweden is often cited in discussions of the future of cash, since it is one of the countries where cash is rarely used and a very useful case study of what happens where there is no national strategy around cash: Cash begins to vanish from the public sphere (because merchants don’t want it and customers don’t bother carrying it, not because of any explicit strategies). However, as the cash drains away, some groups are marginalised and excluded (which is why a strategy is needed). Homeless people may accept cards, but pensioners and refugees can be shut out by a cashless world.
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