Global: Swedish Central Bank Urges Legislation to Safeguard Cash Usage

Amidst a declining trend in cash usage across Sweden, the central bank governor emphasizes the necessity for legislation to uphold the accessibility of notes and coins for payments.

Despite Sweden’s reputation as a frontrunner in transitioning towards a cashless society, data from the Riksbank reveals a 10% reduction in the circulation of notes in 2023. This trend, however, faces increasing dissent, with 44% of Swedes expressing negative sentiments toward the diminishing use of cash, marking a rise from 36% in 2022.

To address these concerns, the central bank advocates for mandatory acceptance of banknote and coin deposits by banks, a measure currently lacking in the existing framework.

Moreover, the Riksbank raises apprehensions regarding cash management, highlighting the sole reliance on a single private entity for the transportation of physical currency to and from retail establishments. The government is urged to formulate strategies to ensure the continued transportation of cash in case of system failures.

In parallel, the report underscores the importance of adapting banking services to cater to individuals facing challenges with digital technology adoption. To streamline payments and identification processes, the wider adoption of technical solutions such as biometrics is recommended.

Additionally, the central bank expresses concerns over the exclusion of certain individuals and businesses from accessing payment accounts due to perceived risks. It suggests that banks should offer more accounts with limited functionalities to mitigate this issue.

Erik Thedéen, Governor of the Riksbank, asserts: “Inclusive payment solutions are imperative. While digital payments may dominate in the future, the role of cash remains vital. Legislative measures are necessary to safeguard its continued acceptance for transactions.

“Banks must also broaden access to payment accounts to ensure inclusivity for all individuals. These steps are fundamental to enabling seamless payments both now and in the foreseeable future.”