Cash is King Again: Nations Reconsider Digital-Only Future Amid Security & Geopolitical Concerns
LONDON – A growing number of countries, including Sweden and the UK, are reassessing their push towards fully cashless societies, spurred by concerns over cybersecurity, financial exclusion, and, increasingly, the potential for disruption linked to geopolitical instability – particularly stemming from Russia’s actions. While digital transactions offer convenience, a resurgence in the use of physical cash is being observed as nations grapple with vulnerabilities exposed by an increasingly digital world.
Experts warn that over-reliance on digital infrastructure creates potential weaknesses exploitable by state-sponsored actors. “While an increased technological world comes with more risks,I don’t think people would wont to go back to the older system,” says Niklas Arvidsson,a researcher at the Centre for Financial Crime and Security at Lund University in Sweden. “We need to accept some risk, but overall there is a massive improvement to our lives.”
Sweden, once at the forefront of the cashless revolution, has begun actively working to protect its cash system after realizing the risks associated with complete digital dependence. This shift comes as concerns mount over the potential for disruption to payment systems in times of crisis, including those instigated by opposed nations.
The UK is also considering the implications of a fully cashless society, particularly regarding the protection of vulnerable populations. ”People have to be careful with their passwords and their facial recognition systems. You’ve also got to be careful not to lose yoru phone and be wary of scams,” Arvidsson cautions, advocating for a national awareness campaign to educate the public on digital security risks. “I think we should do a national campaign on this to boost awareness. The Government should write to every single person making them aware of the dangers and risks of banking online. Do we all want to go back to using paper to pay for things? No.”
Arvidsson stresses the need for a balanced approach, promoting technological innovation while concurrently safeguarding the system and supporting those who rely on cash. “My advice would be to have a good balance in promoting innovation and creative solutions, as well as technological improvements, while at the same time safeguarding the system and helping people who rely more on cash. Doing both simultaneously occurring is really critical.”
The renewed focus on cash represents a pragmatic response to evolving threats, acknowledging that a diversified payment landscape - incorporating both digital and physical currencies – is crucial for resilience and financial security in an increasingly uncertain world.
