Put simply, the more people who use or accept an instrument of payment, the greater benefit each consumer or merchant has from using or accepting it. Few people would want to have a card if there were not sufficient traders who accepted card payments. Traders on their part would not want to accept card payments if there were not enough consumers willing to pay with cards. In other words, a critical mass of users is needed for a payment instrument to be generally accepted and successful. When fewer and fewer people are using a payment instrument, one gradually reaches a point where it is no longer profitable to continue using the instrument. Then it will disappear from the market, which was the case with cheques in Sweden in the 1990s. Given that the use of cash is declining rapidly, there is reason to wonder whether we are now reaching the same point with regard to cash. Ac-  1 On 31 October 2017 there was SEK 45.2 billion in valid banknotes in circulation, with the 1,000-krona banknote accounting of SEK3.5 billion of this. The value of the valid coins was SEK 2.7 billion, including commemorative coins (SEK 34 million). 2 [6]  cording to current research, half of Swedish traders believe they will stop accepting cash by 2025. In other words, for Sweden the cashless society is no longer just a hypothetical situation in the distant future.
This infrastructure is often housed with the supplier of the payment service or with some other intermediary. After these checks, the actual payment is implemented, that is, the money is moved from the payer to the recipient. This is called clearing and settlement and it requires a further infrastructure. The systems that manage the entire process are characterised by both network effects and economies of scale. Both aspects mean that the payment infrastructure must of necessity be very concentrated and standardised. Although this is necessary, it entails a number of other problems. One such problem is greater vulnerability in society as a result of what is usually called the “single point of failure”. If the infrastructure is affected by serious shocks, there are no alternatives available, especially if cash has been phased out. Let us assume that the card system stops functioning for some reason, at the  5 [6]  same time as cash payments are no longer possible in practice. This situation would cause serious disruptions to society. A further aspect to take into account is that when the infrastructure is concentrated to the hands of a few, it is easy that problems arise with regard to lack of competition and entry barriers for new agents. Ultimately, this can in turn entail efficiency losses for society as a whole and low incentives for innovation. A potential e-krona could alleviate both of these problems. An e-krona could be based on a separate infrastructure that could be used if the alternative systems fail.