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Sweden's Cash-Free Future Looms -- and Not Everyone Is Happy About It
HughPickens.com writes: Liz Alderman writes in the NYT that bills and coins now represent just 2 percent of Sweden's economy, compared with 7.7 percent in the United States and 10 percent in the euro area and this year only about 20 percent of all consumer payments in Sweden have been made in cash, compared with an average of 75 percent in the rest of the world. "Sweden has always been at the forefront of technology, so it's easy to embrace this," said Jacob de Geer, a founder of iZettle, which makes a mobile-powered card reader. In Sweden parishioners text tithes to their churches, homeless street vendors carry mobile credit-card readers, and even the Abba Museum, despite being a shrine to the 1970s pop group that wrote "Money, Money, Money," considers cash so last-century that it does not accept bills and coins. "We don't want to be behind the times by taking cash while cash is dying out," says Bjorn Ulvaeus, a former Abba member who has leveraged the band's legacy into a sprawling business empire, including the museum.
But not everyone is pleased with the process. Remember, Sweden is the place where, if you use too much cash, banks call the police because they think you might be a terrorist or a criminal. Swedish banks have started removing cash ATMs from rural areas, annoying old people and farmers. Credit Suisse says the rule of thumb in Scandinavia is: "If you have to pay in cash, something is wrong." Sweden's embrace of electronic payments has alarmed consumer organizations and critics who warn of a rising threat to privacy and increased vulnerability to sophisticated Internet crimes. Last year, the number of electronic fraud cases surged to 140,000, more than double the amount a decade ago, according to Sweden's Ministry of Justice. Older adults and refugees in Sweden who use cash may be marginalized, critics say, and young people who use apps to pay for everything or take out loans via their mobile phones risk falling into debt. "It might be trendy," says Bjorn Eriksson, a former director of the Swedish police force and former president of Interpol. "But there are all sorts of risks when a society starts to go cashless."
But not everyone is pleased with the process. Remember, Sweden is the place where, if you use too much cash, banks call the police because they think you might be a terrorist or a criminal. Swedish banks have started removing cash ATMs from rural areas, annoying old people and farmers. Credit Suisse says the rule of thumb in Scandinavia is: "If you have to pay in cash, something is wrong." Sweden's embrace of electronic payments has alarmed consumer organizations and critics who warn of a rising threat to privacy and increased vulnerability to sophisticated Internet crimes. Last year, the number of electronic fraud cases surged to 140,000, more than double the amount a decade ago, according to Sweden's Ministry of Justice. Older adults and refugees in Sweden who use cash may be marginalized, critics say, and young people who use apps to pay for everything or take out loans via their mobile phones risk falling into debt. "It might be trendy," says Bjorn Eriksson, a former director of the Swedish police force and former president of Interpol. "But there are all sorts of risks when a society starts to go cashless."
If you don't know why they're doing this, you haven't been paying attention.
This is how the government manages to track and control every aspect of your life, and I do mean every.
Just cruising through this digital world at 33 1/3 rpm...
I thought all countries (in the developed world, at the very least) had laws stating in one wording or another that it is illegal for a business to refuse payment in the country's official currency?
-=This sig has nothing to do with my comment. Move along now=-
Only criminals will have cash.
But I'm not sure what they will spend it on.
This issue is a bit more complicated than you think.
i just want to buy stuff - anonymously, without the shop-keeper knowing my name and other personal details just because i bought a fucking coffee or a hamburger or something.
lack of privacy and anonymity are the main reasons i dislike online shopping and use it only very rarely - delivery of the purchased goods requires that i give the vendor my personal details which they then immediately assume they are entitled to store in a database, use to spam me, and sell, trade, or give to third-parties.
even when they have a checkbox option saying "don't spam me" or similar, some arsehole in their marketing department will take it upon themselves to decide that i didn't really mean that, or make some exception for their super-important spam (spammers always say "my spam isn't spam") or their database will frequently have that field "accidentally" cleared.
There are kids around here who think nothing of hauling out a Plastic Card to buy a 50 cent Candy bar.
Typically, a Cashless Society has a lot of hidden overhead, and those who promote the concept the most tend to benefit from that overhead.
It's not a Conspiracy Against Freedom, it's the Triumph Of the Hidden Middlemen.
I don't know how it is in other countries, but in the United States, accepting legal tender is mandatory only for repayment of "DEBTS, PUBLIC AND PRIVATE". To avoid this, a shop can require prepayment for all goods and services so that the customer never incurs debt.
In that case, will it be a crime to buy something before becoming an adult? I was under the impression that only an adult could hold a bank account in his own name; anyone younger than 18 (or thereabouts depending on jurisdiction) has to make do with cash.
What about the fees for a EFT? lot's of small shops don't like cards due to the fees also cash tips are big (at least over there they don't have that tipped min wage BS)
A cash-free society means the banks, and any business or government or person with juice, knows what everyone is doing. If you have no problem with this, build your next house with glass walls, and put a streaming camera and mic on your person.
All this, contrast to corporations and governments. Corporations aren't people, so you can't really spy on those. Corporations are now freeer, and now don't even have to declare a nationality. Their banking is private, if they desire. Derivative markets are untrackable and untaxed. They don't pay taxes. Yet they demand we give it all up to them, because ???? we're idiots.
Governments? The US, UK, Australia and NZ are frothing at the mouth to destroy any whistleblowers who rat them out. Assange is STILL in jail, no charges other than trying to get away from retribution. Wikileaks supporters have problems flying in airplanes and crossing borders. And the governments have no problem spying on everyone else and demanding that right. And the Cayman Islands secret banking system is left alone, because the CIA, the mob, and corporations like their privacy.
... is a bitch.
I wonder what kind of measures the Sweden have against losing it. And if I'm not mistaken most payments go through the Internet and of course the Internet is supposed to be 100% reliable ... oh, wait.
P.S. George Orwell wasn't a science fiction writer 'cause he actually (fore)saw the future. The future where everything you do is logged and categorized.
https://www.treasury.gov/resou...
"This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. "
this is to prevent things like a Brainless Git paying a US$25.00 bill in pennies or somebody stripping a businesses safe by using large bills to pay for small transactions.
in short if it would be a problem to handle cash (or some subset thereof) its all fair game. (but its common to post a sign to warn clients)
Sweden Yes!
there is no law of any kind that requires me to do business with any specific store of business, either
Specific business? No. Specific kind of business? Yes. Zoning laws require you to buy food rather than growing it. Indecency laws require you to buy clothing. Sit/lie laws require you to buy or rent housing rather than sleeping on public property. And shared responsibility laws require you to buy health insurance or face drastic tax hikes.
If the grocery store I habituate decided tomorrow to start taking plastic only, I'd find somewhere else to shop on principle alone.
So what happens once all grocery stores within walking distance go cashless?
Aren't 'marginalizes old people and refugees' and 'makes racking up consumer debt ever easier' typically considered features, rather than bugs, in payment systems?
That's what they told the black people: "Sorry, it's just how it is, we're white, you're black so you have to work for us, Deal with it". Forever since then, things have been thus, with no change.
Compromise. Limit cash to transactions under say $50
Table-ized A.I.
'"Sweden has always been at the forefront of technology, so it's easy to embrace this," said Jacob de Geer, a founder of iZettle, which makes a mobile-powered card reader'.
In other news, sharks were in favour of sea bathing.
I am sure that there are many other solipsists out there.
If the rest of the world has 75% of transactions being paid in cash ( seems legit, if maybe even a tad low ) how will people that come to Sweden for tourism pay for anything?
Seems like a great way to insulate yourself from the rest of the world and have your economy grow stagnant to me...
To err is human; effective mayhem requires the root password!
Sure, I don't use anything but my credit card in Sweden. The only times I'm using cash is when I go to a night club and they don't always take credit cards and they will redirect you to an ATM located nearby. Super annoying.
I won't complain if I don't have to use cash anymore...
The real reason why this is happening is the very real possibility of introducing negative interest rates. Some EU economies already have negative rates, which essentially is a tax on holding your deposits. This only works when you don't have any other avenue to convert your savings. Barring converting your wealth into other assets (which they'll gladly track, since there will be no anonymous cash transactions), you'll have to pay this tax because they say you have to.
Welcome to completely captive economic hell, brought to you by central bankers worldwide. Think it isn't happening? It is, just on a small scale so far. If Sweden folds and goes cashless, the rest of the banking cabal will lick their chops at the prospect of fleecing an entire population, and enact it as soon as possible.
They get a slice of the transaction when you pay via plastic (the trader pays 1-3%). They get a bit when you pay in cash since the retailer will have to pay the bank a bit (cash handling charge) when they pay in at the end of the day. However bankers get nothing on many payments: the man who mows the lawn, the baby sitter, the window cleaner, ... many of these will spend what they earn as cash - so several transactions that the banks do not get the chance to bacon slice.
OK: this might not be a large part of the economy, but all those free transactions must be annoying them!
Many fees on cards.
My ism, it's full of beliefs.
This was an *extremely* annoying aspect of visiting the ABBA museum in Stockholm: they refuse to accept cash at all. Neither for admission nor for the gift shop. At least in 2013 when I was there, signs were posted with an explanation by Bjorn who mentioned his son's apartment being robbed and how the burglars made away with some cash. So... "ban all cash" because my kid left some in his apartment and it got burgled. For an otherwise smart and talented guy, this has to be one of the most fatuous rationales ever.
Anybody want a peanut?
No more ADSL for YOU! The telephone service was privatized and the new "private" company feels it too expensive to keep the copper running so a large chunk of the country will no longer have telephone service or ADSL. Well, at least we have one million new muslim immigrants to keep us entertained. (Yes, I am one of the the people who will no longer have access to the Internet. They say I should build a huge mast, a directional antenna and an amplifier so I can get "3G"but I don't have the money (about 10K EUR). I no longer have phone or Internet... My great granddad put a phone in this house in the 1940's.
Sweden IS going to SHIT!
I like the idea of this. If we can get our mobile payments systemsup to snuff this would make things a lot easier. My issue is the hidden costs involved with it. One of the reasons I use cash is because I know it costs small businesses money if I use my credit card. I would rather get cash and pay that way for local shops than cost them the percentage they pay to the credit card company even though I may get a few cents back. The only way I could get behind this totally would be for there to be some way to make the payments with the middle man taking a big chunk of the money. IF it was true micropayments where the middle man takes a couple cents then maybe, but as long as it is a couple percent, I will still pay with cash.
"Information wants to be expensive" - Stewart Brand, the same guy who said "Information wants to be free"
the founders of the US explicitly rejected, but their great-grandchildren stupidly have adopted. Central Banks provide paper money in place of something of real inherent value like gold or silver, and in doing so provide a means of manipulating and robbing the public by inflating or deflating the value of that paper money by printing more of it or taking some of it out of circulation. Going cashless, where the individual no longer has ANY physical thing but rather just some digits stored in a computer will only further enable the corruption and resulting hazard for the individual. Consider:
The founders of the US rejected the idea of a Central Bank because such banks were one of the mechanisms that the governments of Europe had used to rob the average citizen. First, government ordered the people to use money printed by their Central Banks, then they had the Central Banks print lots of fiat currency to pay for wars and palaces etc, which allowed the leaders to buy what they wanted but diluted the value of each unit of currency. This functioned as a huge hidden tax on the general public. The founders of the US rejected this hidden form of taxation/robbery and thus rejected the Central Bank idea as the primary enabler of it. Sadly, the US now has a Central Bank - The Federal Reserve Bank, which is a private entity whose owners and managers are extremely secretive and capable of using their power to manipulate the government or be manipulated by the government with little or no oversight or insight by the public.
The "Cashless society" is simply a further bite into the rotten apple of Central Banks. Once the individual has no actual physical currency, the banking and governing interests can completely manipulate the value of a unit of currency and even make it appear or disappear directly in bank accounts with ZERO transparency, ZERO accountability, and without the public even knowing if, perhaps, the Central Bank is doing something hyper-evil like manipulating the currency of only members of certain political parties, or people who frequent certain establishments, etc. In a cashless society, freedom and liberty must necessarily disappear - as users become concerned that various actions they take leave them vulnerable to having their individual assets manipulated, they will naturally find that they must go all-in on political correctness for the safety of their families. If you are shocked by governments ordering ISPs to turn over the records of users and ordering those ISPs to not tell their users, just imagine a world where those same governments order a bank to manipulate somebody's account and not tell anybody they are doing it...
Paper money was the initial dangerous step. Digital money is the final dangerous step to enabling every evil thing governments desire.
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered...I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." - Thomas Jefferson
"If ever again our nation stumbles upon unfunded paper, it shall surely be like death to our body politic. This country will crash." - George Washington
“History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and it’s issuance.” - James Madison
They bounce back and forth between Sweden and Scandinavia. The fact is, I go to Denmark constantly and while I have a few thousand Danish crowns sitting in a drawer at home, I don't bother. I live in Norway and take out a total of about 500NOK in cash a month for my kids to have some spending money. We were going to get the credit cards, but Norway's DnB and Denmark's Danskebank have both released easy payment apps which eliminate the need for cards now... and nearly everywhere which accepts cards also seems to accept app payment now. I also grocery shop in Sweden quite often (2-3 times a month). The problem there is that you need a Swedish 10 crown piece to use a shopping cart. It's not a rental, instead it's to make sure you put the cart back or leave the 10kr in the cart for someone else to claim when they put it back.
The main issue I have with the article is the piss poor writing about the doubling of electronic fraud without properly addessing the obvious. The massive increase in electronic payments will increase the amount of electronic fraud... obviously... but what's been the impact on counterfeiting? I'd imagine that the decrease in counterfeiting paper money has been approximately equal to the increase in electronic fraud.
Then there's the issue about privacy... All that needs to be done is that the Swedish government says "We won't snoop on you without asking first" and that should be good enough. Generally Scandinavia has self-enforced laws. This means, all you have to do is declare something illegal and people will actually stop doing it.
'...In general, the rule of thumb in Scandinavia is: "If you have to pay in cash, something is wrong."...'
I sort of get this, the idea that if you have nothing to hide, then who cares if your transactions leave a trail, but if the Swedes really want to get rid of cash, then,
A. Stop printing it, and,
B ban all transactions using cash.
But I wonder about folks who do no wrong but simply want to live their lives privately, and I wonder about the inefficiency of making every transaction go through intermediaries; transaction processing companies, card issuers, etc. And as a side note, if I just want to purchase something directly from you, say a cord of firewood that fell in a storm in your backyard, do you then need to have a card reader and a deal with a credit card company, and do they get a cut of our private transaction? It seems to make some things more complex than necessary.
Don't step on the baby.
It isn't just about taxes... it is about logs as well. This is why there is such a push for blockchains for transactions.
Imagine the sheer intel data that one has by knowing what one person bought and sold with everything. From there, you can tell if they are at home (to find the times when their place is robbable), where their kids are, who someone interacts with.
Right now, people don't give a rat's ass... but what happens when government starts to do purges, Stalin-style, and can easily, with a search term, find everyone linked to one person... and have them all "disappear" [1].
My personal take... If my government demanded I stop using cash, I would be swapping between BitCoin and DASH (by swapping between the two, I could separate my transactions completely from BTC's blockchain.) Since BTC and e-currencies are too unstable for holding long-term, I'd be using the currencies to buy and sell precious metals, and the metals would be used for a long term store of value.
It's also an Aussie thing for both credit and debit cards. Electronically shifting money from my account to an account in a different bank takes at least a day to "process". Cheques take three business days to "clear". ATM machines charge $2-3 per transaction.
And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
Canada has gone for debit cards in a big way. I hardly ever pay cash for anything.
Our local public transit system is rolling out a smartcard fare system. On my way to work maybe one person a day pays their fare in cash. Yes, TransLink can track where I ride the bus. And if they ever misuse that information I'll ditch my current Compass card and buy an unregistered anonymous one.
...laura
We were warned over 200 years ago against having a central bank. No country should have one. They are more dangerous than a standing army.
In the U.S. the Federal Reserve (not a part of the Federal government) pretty much runs the country. Nobody has the power to oversee or control it. The income taxes you pay don't go to the government, they go to the Federal Reserve. The Secretary of the Treasury is not an employee of yours; he's an employee (as in paid by) of the Federal Reserve.
Negative interest? Ha, that's just the start of the funny stuff. Wait for what's to come.
because the banksters get a cut of every non-cash transaction and companies like Walmart negotiate with them to get a lower rate. Moreover with Google Pay, Samsung pay and Apple pay, they get a cut on top of that as well. Basically non-cash payments penalize small shops and drive up the costs for everybody.
That's a good point, however a bank is not a normal business, more like a public utility. At the end of the day every form of trade ever invented needs rules to exist, even barter requires property law. In fact that's what the term "economic market" means - a set of rules governing trade.
And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
A merchant, such as the government, can structure transactions to avoid the creation of debt in the first place. Acceptable forms of payment for a prepaid transaction are covered under invitation to treat law rather than legal tender law.
Here in Oz we sold half of our state owned telephone company and introduced competition, the half they kept has control of the wholesale network. Telco's were split into wholesale and retail companies, wholesale prices were regulated. Wholesale companies have a "universal service" obligation, meaning they must supply and maintain communications infrastructure to remote areas at the same price they are supplied to everyone else. Retailers cannot charge more in remote areas but they have no obligation to cover them.
The (very successful) public stock float was a huge story here, many ordinary Aussies (including myself) bought into the generous small investor share packages by filling in a form at the post office, most of them doubled/tripled their money in a year or so. The phone network itself is a "natural monopoly" and is best managed as public infrastructure, ours is in the process of a major national upgrade and all the politics that goes with giving private companies tens of billions of taxpayer dollars to build and operate a "natural monopoly".
Note the universal service obligation was a central part of the government telco's mandate decades before it was privatised in the early 90's. Voters in general knew that the government telco took the universal service obligation seriously and did a reasonable job providing service in the bush, they were not going to let private owners quietly shirk that obligation.
And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
Does anyone really want to take economic advice from a guy who wears big poofy sleeves and spandex overalls? I mean, if he wants to give advice on how to bang hot Swedish babes, OK, I'm listening. But I really don't need to know what he thinks about monetary policy.
https://youtu.be/J3ECxyIS9oI
https://youtu.be/qrfY7RNaBjw
You are welcome on my lawn.
Profit Margin (ttm): 45.59%
Operating Margin (ttm): 65.40%
Note: This is VERY profitable, twice as profitable as AAPL, for example.
This issue is a bit more complicated than you think.
When I travel, I have the local currency.
Sometimes, you need it for something simple, like when the mobile card reader in the cab doesn't work (I was with my boss who puts everything on cards, so I had to bail him out with my cash, and expense it later.)
I also don't relish the idea of running my card for every meal - increasing the odds of some skimmer screwing the card up and getting a fraud alert put on it, just when I need it most. (I know, a lot of places, especially in Europe, bring there card reader to you, rather than the USA standard of you letting your numbnutz waiter wander off with your card, where he can fondle it in private...)
I prefer to use cash, while traveling and domestically for any transaction under about $100. It is more convenient for me, since I am someone who actually looks at my credit card bill, and *gasp* balances my checkbook, unlike kids these days who just glance and say "that looks about right".
I did actually find a case where my bank cashed the same check twice! About 5 months apart. No, they couldn't explain it, and they couldn't deny it, and returned the money, no questions asked. I am just glad it wasn't the check I had written about the same time for my car...
This issue is a bit more complicated than you think.
Nothing? That's what I thought. Don't tag it with bitcoin when it's not involved with the story. Fucking editors.
And you think those numbers are accurate? You're gonna trust stats rather than someone who's able to give what should have been the highest (out of stater) prices in a variety of areas? Don't be silly. I'll post this as an AC as I can guess you'll just accept anything from some 'havoscope' site as opposed to someone who's actually familiar with the subject and does things like travels around and gets to see the various markets involved.
Of course, if you want to pay those prices then I'm sure someone will be more than happy to sell you that at those prices. Hell, let me amuse myself and open your link...
Yeah, you should read your link... They say $300 to $8. Yup. $8 for a gram of coke. They claim those are the UN's numbers. They then have a $30 value as a user-submitted value.
Like I said, the numbers given are bullshit. You probably believe the prices given by the cops when they confiscate marijuana. I've given you an education and you have opted to remain ignorant. That is something you might want to work on - or stay away from drugs, I'm not sure that they will be good for you.
"So long and thanks for all the fish."
Sweden currntly has a negative interest rate. The Swedish central bank's interest rate is currently at -0.35% and has been for quite a while. This has never happened before in history. It is not passed on to savings accounts yet, but they are all at 0% interest.
The effects so far has been a booming real estate market, fueled by deductable mortgage interest payments, deductable costs for home improvement and a removal of real estate taxes. Spending on the mortgage interest deduction alone outstrips the nation's total defense spending, and that is at the present low-rate interest environment.
According to this report from our central bank, aggregate debt quotient for a Swedish citizen is now 170%, 315% for someone with a mortgage: http://www.riksbank.se/Documen...
And by official calculations we have negative or no inflation, owning to the fact that our inflation figure apparently includes the effects of the mortgage deduction. Which is weird because not everyone has a mortgage.
We also have no rules regulating the amortization of loans.
So how do they plan to deal with tourists? None of the articles mention them.
I have a German bank card with chip and that generates a foreign transaction fee each time I use it for foreign currency, which is not good when you are tourist and making small purchases. Then I have an American bank cards, no chip, where the on-line banks eats the foreign transaction fee, with a limit per month. However I run into a lot of places that have issues because of the no-chip.*
*Yes according to visa/mastercard/eurocard terms places are required to accept both but then there is reality.
And when I have visited the US I realized that the government control there in reality is a lot greater than in Europe.
If builders built buildings the way programmers wrote programs, then the first woodpecker would destroy civilization.
Remember, Sweden is the place where, if you use too much cash, banks call the police because they think you might be a terrorist or a criminal.
Remember, the USA is the place where, if you use too much cash, banks and casinos are legally obligated to report it to the federal government as a possible warning sign of illegal activity. And "too much" is a mere $5,000, so if you buy a halfway decent used car with cash, guess what? You've just tripped the reporting requirements.
It's going to be hard to get your audience here convinced that Sweden is more fascist than wherever they live, because they almost certainly live someplace more fascist. US, UK, both fit the bill eh?
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
It's also an Aussie thing for both credit and debit cards.
But not EFTPOS, which is what the GP was talking about. If you click SAV instead of CR on the pinpad, there is no fee.
Electronically shifting money from my account to an account in a different bank takes at least a day to "process".
Banks process inter-bank transactions overnight via a batch process.
Cheques take three business days to "clear".
Who uses a cheque? What is this 1980?
ATM machines charge $2-3 per transaction.
Only if you use an ATM that doesn't belong to your bank.
It seems to me that it's something you should negotiate about with your bank.
You are a hilarious and clueless fucker. No bank negotiates anything with its customers. They selectively offer a service for a fee. The fee will likely increase in time. If you don't like it, even if you are Bill Fucking Gates, your only alternative is to take your business elsewhere.
Now, I know that you think that you're a mogul of Warren Buffet's financial stature and that a national bank will cower and bend to your will if you threaten to take your paltry few thousand dollars in deposits to another bank. After all, that's what the tellers tell you. But, you're so incredibly clueless and naive that it is hilarious.
Thanks for the laugh!
Electronic transfers are "instant" in the UK (which guarantees within 2 hours, and is usually within 5 minutes if between banks, or instant at the same bank). This was introduced about 6 years ago.
Wikipedia says the system was introduced to increase competition, so it sounds like something every country should have.
https://en.wikipedia.org/wiki/...
But there will still be a way to buy my hookers and blow, because you're kidding yourself if you don't think the black market economy is massive.
"If any question why we died, Tell them because our fathers lied."
Why not a cryptocash system, wherein a particular smart chip requires a hardware register in a non-default state to write to it, and carries a complete signature of its contents? You could use small credit chips, each carrying a digitally-signed serial number and value--a 1024-bit identifier, a value (like $5), a system ID (serial number of the credit chip it's assigned to), a 7kB random padding block, and a private-key-encrypted hash.
You'd trade the chips as cash, readable by any dumb reader. You could use a connected system to send the contents of each chip to a central authority and then rewrite them into an account or into a new chip, combining a whole wallet of chips onto one. This allows you to make change by exchanging a $20 credit chip (verified by an unconnected machine) and getting back three $5 credit chips (also verified), or by accepting three $5 credit chips and rewriting one as a $1.23 credit chip (communication with central authority), or by accepting a $20 credit chip and rewriting it as a $3 credit chip (also by central authority).
Each of these chips would hold its own account--a full list of denominations, down to a dozen pennies--and a computer (such as a bank's database) could wipe the chip and reorganize its contents (convert 23 pennies to two dimes and three pennies). The credits would act like cash, in so much that you can't know who holds a particular credit chip, you can trade credit chips, and they can be deposited into banks; the physical chips would release their contents to accounts, so your bank account holds real dollars. Obviously, banks would account for how many dollars you have, and pool "your" dollars into their accounts, thus they'd still loan more than they had cash-on-hand.
All the advantages of cash--no personal identifying information, handling without networked electronics, physically tradeable, cheap to produce (bit of plastic with a printed circuit on it)--and of digital currency--can be loaded into accounts (and the accounts can just be a physical card rather than far away). A few of the disadvantages of digital currency, notably that you need some form of powered electronic device unless you put an eink screen to display the current denomination onto each credit chip, which would make it a hell of a lot less cheap to manufacture.
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Ironic that this is happening in the first country in Europe that issued paper money (1661).
Just wait until stagflation cuts in and the central bank wants interest rates to go negative. In a cashless society, you can't have a run on the banks. You can't get your cash and keep it under the mattress. You have to keep it in a bank and pay the bank interest to hold your credit.
This works in a country the size of California, but not likely for the larger ones.
This is all good for locals for whom you can simply insert the card and type your PIN, but for someone like who has a foreign credit card, and therefore can't use the PIN code, I need to sign the receipt every. single. time.
This, combined with the fact that I'm Swedish but don't have a Swedish identity card with a social security number on it (my old one expired years ago) makes any purchase in Sweden a huge hassle for me.
I was happy to come back to my new home where I can use cash without feeling embarrassed.
Silver and gold have properties that make them particularly useful as currency. They're also pretty and fairly rare. They're natural for value, but the worth of a piece of gold is the same as the worth of a piece of paper: whatever I can get for it. The gold is useful in some other ways, but its currency value really has nothing to do with its usefulness.
Nor would basing the currency on gold give us anything, as most money is not currency. The value of gold would vary, depending on the gold supply versus the amount of stuff to buy. The amount of money would vary just as it does now, unless we were to go to a 1700s financial system, as the only way to go to avoid paper money is to not have the sort of banks Adam Smith complained about.
The Fed does control the supply of money, true, and it isn't really accountable to us as individuals, but it can only affect the overall value of money. Any individual is safe from extralegal manipulation by banks, as money transfers are transparent and accountable. Keep an eye on your statements and question anything you don't understand.
Only the extremely gullible would presume any person or organization with a lot of power would always obey the laws and would never abuse its power. That rule is not just for governments.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes