Hardly many people know that Sweden is the birthplace of paper money in Europe. The Scandinavian country is also the first country in the world that is seriously considering becoming one of them, money.bg writes.
Let’s go back in history. On July 16, 1661, the first banknotes were put into circulation in Europe.
This is thanks to the Swedish bank Stockholm Bankos. The banknote is issued by an issuing bank and is a complete expression and result of the development of credit for circulation at that time.
Very soon, paper money almost completely replaced coins, making the state an absolute innovator. By comparison, the use of printed banknotes on the Old Continent became popular only in the 18th century.
History of banknotes
The first paper money appeared in the 7th century in China. And the reason is the need for a more flexible means of payment than bulky copper coins.
Their introduction took place gradually and lasted from the time of the late Tang dynasty (618-907) to the Song dynasty (960-1279).
In the wholesale trade, traders began to issue paper records, valid on a small regional scale and for a certain period.
The advent of paper money led to the first inflation in 1020.
At the time of Marco Polo, Europeans still had no idea that they could pay with money on paper, despite the growing need for it.
In Europe, transporting large sums of cash over long distances posed great risks and inconveniences, and merchants gradually began to use bills of exchange, first in medieval Italy and the county of Flanders.
At the beginning they are registered, but soon they are transformed into a written order for payment of the bearer’s amount.
These bills of exchange can be considered as the forerunners of the first European banknotes created in Sweden.
When they were introduced into regular use in 1661 – the country already had an abundance of honey and therefore it had a low value.
This in turn led to an extremely large and impractical size of the coins, which weighed several kilograms.
Is the end of the paper Swedish krona coming?
For years, Swedes have said that “if you pay cash, then something is wrong.” According to the Stockholm Royal Institute of Technology, less than 80 billion Swedish kronor (8 billion euros) are in circulation in 2020. Of these, only 40 out of 100 are involved in daily transactions.
The rest are hidden deep in the houses of older Swedes or used by the gray sector. For comparison, only 5 years ago, in 2016, paper money in circulation was 106 billion kroner.
Today, even parents rarely give their children pockets in cash. According to a consumer survey, only 16% of minors receive cash on hand. The others have debit cards and savings books.
That is, they have a digital savings account. More than 80 out of 100 people, young and old, pay with contactless bank cards and even with their mobile phones. In reality, coins and banknotes in the country are only 1% of the gross domestic product.
“We Swedes trust banking systems and are used to new technologies, so removing banknotes is an ideal solution,” popular Swedish media publisher Pia Stolt, who supports the Swish mobile payment system, told the Guardian in 2019. .
The app is similar to Revolut, but was created by several Swedish and Danish banks. It became such a hit that already large banking institutions in the country refuse to accept cash.
More and more media, politicians and ordinary people in the Scandinavian country are launching the idea of eliminating paper money on the grounds that it is no longer needed. In 2020, 4 out of 5 purchases in Sweden are made electronically.
Removing banknotes against money laundering
The main stated goal of the Swedish government is to fully tackle money laundering and organized crime. For this purpose, particularly strict requirements have already been introduced when using cache.
“In offices where banknotes and coins are still used, customers need to explain in detail where they got them. In this way, they are helping with legislation against money laundering and terrorist financing.
Various forecasts in the Scandinavian country indicate that it is quite possible that physical money in Sweden will disappear completely by 2030.
However, one in three Swedes still believes that the availability of available funds in people’s hands is a fundamental right.
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