TLDR

Sweden and Norway are restoring cash reserves after discovering weaknesses in centralized payment systems.
Ethereum cofounder Vitalik Buterin believes decentralized networks can provide a more resilient alternative during infrastructure failures.
Buterin emphasized that Ethereum must become both private and robust to serve as a backup for cash in critical situations.
Norway’s reliance on the Vipps app raised concerns about the fragility of digital-only payment models during crises.
Industry experts are divided on whether Ethereum is ready to function reliably without internet or electricity access.

Ethereum may soon position itself as a digital backup to cash, as Sweden and Norway reassess their cashless strategies. Both Nordic countries recently reinstated cash reserves due to vulnerabilities in centralized payment networks. Ethereum co-founder Vitalik Buterin responded by pointing to the blockchain’s potential to offer a more resilient, decentralized alternative.

Ethereum Gains Attention After Nordic Shift

Sweden reduced its cash usage to 1% of total transactions before changing course due to recent global instability. Officials required citizens to store physical cash after concerns grew about the risks of infrastructure failure. The war in Ukraine exposed how easily centralized networks could collapse during digital disruptions or cyberattacks.

ETH emerged in the discussion after Buterin highlighted its potential role in such a crisis. He noted that Ethereum could provide security where centralized systems failed. However, the technology must meet specific standards in resilience and privacy to be truly effective in emergency conditions.

Nordics are walking back the cashless society initiative because their centralized implementation of the concept is too fragile. Cash turns out necessary as a backup.

Ethereum needs to be resilient enough, and private enough, to be able to credibly play this kind of role.… pic.twitter.com/eFVYT254qN

— vitalik.eth (@VitalikButerin) May 25, 2025

Buterin emphasized that Ethereum should operate independently from vulnerable physical infrastructure. Sweden’s reversal served as a case study of why decentralized alternatives may be necessary. Thus, the Ethereum community now faces the challenge of making the network suitable for high-reliability use cases.

Norway Reassesses Cash After Digital Risks

Norway’s digital reliance also raised alarms when its popular Vipps app showed potential weakness under systemic threats. Like Sweden, the country moved to protect physical cash use in case of infrastructure collapse. Authorities feared payment network paralysis could leave citizens without transaction options.

ETH entered the conversation when Buterin suggested a decentralized system could offer more durability than current solutions. He stressed Ethereum’s need to function in low-infrastructure environments. Norway’s policy change reinforced how digital-only payment models remain susceptible to larger geopolitical disruptions.

In response, industry experts debated whether Ethereum is already ready for such a role. Some, like Phoenix Labs CEO Sam MacPherson, stated that Ethereum has the necessary safeguards. Yet others pointed out ongoing challenges, especially around offline functionality and hardware dependencies.

Ethereum Faces Scrutiny Over Offline Capability and Privacy Standards

Ethereum still lacks independent offline transaction capabilities, making it dependent on electricity and the internet. Without offline solutions, Ethereum cannot currently match the reliability of physical cash. Buterin acknowledged that technologies like zero-knowledge proofs may help, but they remain in the early stages.

He also highlighted that such tools depend on trusted hardware, limiting their deployment in critical scenarios. Meanwhile, stablecoins offer another pathway toward more resilient digital currency options. These fiat-pegged assets continue gaining traction as alternatives to traditional systems.

However, Ethereum must resolve privacy and resilience concerns to replace cash entirely. NodeOps representative Harrie Bickle warned that today’s ETH tools demand high technical infrastructure. For ETH to serve as a cash alternative, the platform needs significant advancement in accessibility and offline readiness.

The post Vitalik Buterin Reacts: Can Ethereum Survive Where Cash Is Failing? appeared first on CoinCentral.

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Filed under: News - @ May 28, 2025 4:35 pm