Money is one of man’s most important innovations, but it is changing form. Cash is diminishing and being replaced by electronic alternatives. We conducted a survey of 741 retailers and used secondary data to identify a date when cash will no longer be a generally accepted means of exchange. The results show that Sweden – who invented cash in 1661 – will be a cashless society in March 2023. This is an opportunity for central banks to reinvent the idea of money and payment systems. Digital legal tender is expected to reduce payment costs by providing seamless real-time payments. In addition, digital legal tender also offers and a foundation for customizable “smart money” that can be used to manage the appropriation of money and its use as a medium of exchange. So, after 357 years of general-purpose medium of exchange with an unrestricted usage, we are entering a time where money can become smart.
Jonas Hedman is an Associate Professor at the Department of Digitalization, Copenhagen Business School, Denmark. His research interest concerns the digital transformation in the finance sector and includes topics such as cashless society, fintech revolution, payment eco-systems, payment innovations, and open-api. He is known for his work on business models and cashless society and been invited guest speaker at both universities, such as University of Mannheim, Alto University, University of British Columbia, and Washington State University, and at practitioner conferences, such as the Internet Day and Broadband Day in Denmark, Seamless Payments and Payment International.