As reported just recently on Zerohedge who referenced the recent article in the International Business Times, the largest bank in Norway has called for a 100% electronic currency- a ban on cash.
How likely is this to occur? As correctly stated by the Norwegian Minister of Finance in the article this would be throwing the elderly population under the bus. Still, I would not put it past the Scandinavian countries to switch to an electronic currency system if push comes to shove. They likely have the means and motives to do so.
As I mentioned this morning, Norway is extremely exposed to the global commodities rout. This is putting pressure on public finances.
If this should occur it has massive implications for the tax structure in Norway, for the lower bound on (negative) interest rates and for the population. This solution is unlikely to be effective, however, if other countries do not go 100% electronic too. History has show that intelligent or wealthy people will find ways to get around capital controls, if they wish to.
This is likely to be a talking point in Davos. We will probably witness the slow creep of electronic currency, and personal incentives to go 100% electronic (from governments and banks) soon. This also might explain why Bitcoin hasn’t really come into conflict with banks, or governments yet, other than China which is trying to impose capital controls currently.
If this is the way we are set to go, then the best thing we can do is educate ourselves financially, and find a way to turn the situation to our advantage.
Should the Norwegian Government turn to a cashless economy in the absence of a global drive for a 100% electronic currency, we can safely downgrade the currency outlook for Norway from “unsure” to “probable downside risk”.