[Solved] World's first country to have cashless economy (2024)

FAQs

[Solved] World's first country to have cashless economy? ›

The correct answer is Sweden.

Just fill in our quick form. Norways is the most cashless country, with only around 2% of payments being made by cash, and 100% of the population having a bank account.

It took Sweden 362 years to transition from being the first nation in Europe to adopt banknotes in 1661 to becoming the world's first cashless economy in 2023.

Sweden is one of the best examples of the results of efforts to create a cashless society. Sweden is exceptional in that the amount of cash in circulation has reduced substantially.

Explanation: The country that is likely to be the first nation in the modern world to go cashless is Sweden. Sweden has been at the forefront of the digital payment revolution and has made significant progress in reducing cash usage.

“China is one of the top countries for using cashless payment systems, but penetration is not 100%,” says Sara Hsu, an associate professor at the University of Tennessee, specialising in supply chain management. “Elderly Chinese still often prefer to pay with cash and some struggle with using mobile payments.”

The downsides of going cashless include less privacy, greater exposure to hacking, technological dependency, magnifying economic inequality, and more. Credit and debit cards, electronic payment apps, mobile payment services, and virtual currencies in use today could pave the way to a fully cashless society.

Sweden, the first European country to introduce banknotes in 1661, became the world's first cashless society on 24 March 2023. Finland and the UK are top–ranked to become cashless societies as well. Poland, on the other hand, has scrapped plans to limit cash payments to ensure freedom of choice.

The Drawbacks of a Cashless Society

Without cash, we would be forced to leave a record of everything we buy. While this may not bother some, there are many who worry that governments and/or corporations could use our purchasing histories as a way to track us, monitor us, and even intimidate us.

In fact, the Mesopotamians, who lived 8000 years ago, were one of the firsts to create a cashless barter system.

Is America going to a cashless society? ›

The US is moving toward cashless payments, with a substantial increase in the use of mobile wallet apps and contactless cards. A report from the Federal Reserve Bank of San Francisco found that payments made using cash accounted for just 18% of all US payments in 2022.

Sweden's move to a cashless society is encouraged by law and in Sweden, a merchant can legally refuse cash payments. Most Swedish banks don't handle cash transactions in-branch and ATMs are not particularly common (with only 32 per 100,000 people, which is low compared to other countries.

193 UN members +Palestine, Kosovo, Taiwan and the Vatican that does not use any currency. Those are arguably the most recognized countries. Even mostly and universally unrecognized nations have currencies: Somaliland for example got the Somaliland Shilling.

An expanded ranking on the number of instant payments per country places India at the top with a figure that was higher than 43 other countries combined. India is expected to keep this position by 2027, although its predicted CAGR will be lower than Brazil, the United States, and Indonesia.

When people are handling less cash, bank robberies, burglaries and corruption drop. Because cash is essentially untraceable, it's a useful tool for criminals, where digital currency is less easy to exploit, and can be shut down quickly if it falls into the wrong hands.

China leads race to become world's top cashless society, says British expert. In China, the proportion of the total amount of money in circulation in the form of cash has dropped to 3.7 percent and is continuing to fall, said Matthews.

Assessing the reasons why Japanese consumers prefer cash, Statista notes its security and reliability are highly valued. Over 55 percent of respondents cited concerns over personal information leakage as being a major drawback of cashless options.