Ethereum co-founder Vitalik Buterin thinks ETH could be a viable alternative to attempts by Sweden and Norway to make their societies cashless.
The countries pulled back recently after discovering that centralized payment systems collapse when physical infrastructures fail. But in the crypto world, this move prompted a different response: The idea that decentralized systems could take on the role.
“Nordics are walking back the cashless society initiative because their centralized implementation of the concept is too fragile,” Ethereum co-founder Vitalik Buterin wrote on X, responding to a Guardian report that both countries now require citizens to maintain cash reserves.
Cash versus code
Sweden had reduced cash usage to just 1% of transactions while Norway’s Vipps app dominated commerce, but Russia’s invasion of Ukraine has exposed critical vulnerabilities when infrastructure attacks could paralyze entire payment networks. Buterin echoed the sentiment, saying: “Cash turns out necessary as a backup.”
Looking at his own garden, Buterin posed a measured observation on the case of Sweden and Norway. “Ethereum needs to be resilient enough, and private enough, to be able to credibly play this kind of role,” he wrote.
Response from Experts
Responding to Decrypt’s inquiries on Buterin’s statements, Sam MacPherson, CEO of decentralized finance protocol development firm Phoenix Labs, disagrees with the Ethereum co-founder’s assessment. “Ethereum is already there. It is designed to be as resilient to hostile actors as possible,” MacPherson said, pointing to DeFi protocols managing billions without major failures.
Such decentralized systems are “designed to be as secure as possible from the ground up,” he claimed. Still, offline functionality ranks as one of the primary challenges if Ethereum were to take on the role of providing a more resilient alternative to cash. Without electricity or internet, Ethereum wouldn’t work on its own.
Zero-knowledge proofs, meanwhile, could theoretically enable offline payments, as Buterin noted in responses, though those remain experimental. “We basically know how to do it, but with the limitation that any solution depends on trusted hardware,” Buterin said.
Another opportunity could be opened with stablecoins, which are pegged to fiat currencies such as the U.S. dollar. “Stablecoins are an exact solution to this scenario,” Anthony Anzalone, founder of walletless blockchain platform XION, told Decrypt. Stablecoins have “exploded in usage and adoption” because they aren’t “reliant on one centralized party,” he explained.
Challenges Ahead
Countries with “unstable governments and currencies” are the most apparent use case and context, Anzalone said. Yet, stablecoins face their own questions about resilience, especially in terms of privacy. “While there are several privacy protocols with the potential to make Ethereum private enough to act as a meaningful alternative to cash, resilience is another issue altogether,” Harrie Bickle, documentation lead at AI-powered orchestration layer NodeOps, told Decrypt.
In the face of crisis scenarios such as those that Sweden and Norway now face, Ethereum could show its resilience by not strictly requiring users to have access “to electricity, secure operating systems, and unhackable Web3 wallets,” Bickle added, pointing out flaws in how Ethereum could remain practical in such cases.
“We must travel a long way down an, as yet undeclared, roadmap before Ethereum will be resilient enough to replace cash transactions,” Bickle said.
Edited by Stacy Elliott.