Typography

I recently wrote two posts for the Sound Money Project about Swedish monetary innovation. The first is about an effort by the Swedish central bank—the Riksbank—to force retailers to accept cash , and the other is about the e-Krona , a potential Riksbank-issued digital currency. This post covers a third topic. For many years now those of us who are interested in cash, privacy, and payments have had our eye on Swedish banknote demand. The amount of paper kronor in circulation has been declining at a rapid pace. Many commentators are convinced that this is due to the rise of digital payments. Since Sweden is at the vanguard of this trend, it is believed that other nation's will eventually experience similar declines in cash demand too. But I disagree. While digital payments share some of the blame for the obsolescence of paper kronor, the Riksbank is also responsible. The Riksbank betrayed the Swedish cash-using public this decade by embarking on an aggressive note switch.  Had it cho...

Merry Christmas and Happy New Year to all my readers. And to everyone who left a comment this year, thank you. It's always fun to debate things over in the comments section and I feel it makes the blogs themselves stronger. Don't forget to check out the discussion board where we had a number of interesting discussions in 2018. The last time I published my Christmas cash usage chart was in 2015. I figured it was high time to update it: The annual Christmas spike in U.S. banknote demand is getting harder and harder to pick out in the chart. So are the monthly upticks coinciding with payrolls. Most people are getting pretty comfortable buying stuff with cards. And so they are less likely to take cash out of an ATM before the holiday chaos or withdraw grocery money after a paycheck has been deposited. Even though transactional demand for dollars is on the downswing, the stock of Federal Reserve banknotes continues to grow at a healthy pace. The slope of the black line (i.e. its g...

Say that the local lottery system has decided to innovate. Lottery tickets can now be used as money. A ticket with a face value of $x can be used to buy $x worth of stuff at any checkout counter in the country. Or they can be held in digital form and transferred instantaneously across the lottery's new payments system to friends, the utility company, or the government tax department. With the payments infrastructure in place, will people actually use lottery tickets to pay their bills, transact with friends, or settle their taxes? Can lottery tickets become money-like? I'm skeptical. Here's my thinking. Say that Jane has just bought $10 worth of digital lottery tickets. At the same time she's chosen to leave $10 in her bank account (she likes the fact that they aren't risky). She spies a coffee stand and suddenly has an urge to buy a $2 coffee. When she arrives at the till, how will she decide to pay? With lottery tickets or deposits? By paying for the $2 coffee wit...