Central Bank (BCRA) head Federico Sturzenegger yesterday announced that Argentina would take steps to follow the “Swedish model”: no, not a towering blonde but rather a practically cashless economy. That’s right, people. We’re not going to be paying with pesos anymore, but delicious meatballs. It’s an unorthodox move for sure, but apparently Ikea furniture and smorgasbords are not legit forms of currency.
Sweden only has 2 percent of its economy circulated as cash and coins. As little as 20 percent of all monetary transactions are made with cold, hard krona compared to a world average of 75 percent. Around half of Swedish banks don’t deal with cash and Swedes have even moved away from using credit and debit cards, instead using mobile applications.
It seems a distant dream for Argentina, where most people only deal with cash – a symptom of a distrust of financial institutions and the economy in general. Many people still don’t have access to bank accounts and debit/credit cards.
At the Buenos Aires Council of Economics, Sturzenegger said that progress won’t be made on stopping Argentina’s inflation problem unless there’s a realignment of monetary policy and modernization – so everyone can access bank accounts and debit cards.
He suggested one way of doing so would be to have an export boom, rather than “two guys in a Wall Street office deciding its time,” but offered no solid method of achieving it.
The problem, he says, stems from “excess dollars” in the economy so at least he knows what inflation is, and his suggestion is to go down the Swedish route – less cash and more digits on a screen allows for easier regulation, supposedly. Sturzenegger told the audience that he has personal contact with Stefan Ingves, his counterpart at the Central Bank of Sweden – two guys I’d absolutely love to go to dinner with.