With one of the lowest levels of cash use in the world, Norway’s government is taking steps to preserve physical money for the unique security and payment functions it provides.
Banknotes and coins are currently used in just three to four percent of all transactions in Norway—among the lowest in the world—and a recent survey by the Financial Supervisory Authority (FSA) showed many Norwegian banks no longer accept responsibility for offering cash services.
In response, the Finance Ministry has instructed the FSA to develop a plan that will clearly delineate the obligations banks have in ensuring cash transactions can be conducted, and that cash continues to be accessible for all who want or need to use it.
Physical money occupies a unique position in the payments landscape, being the only payment option that does not depend upon electrical or internet infrastructures. As such, it serves irreplaceable functions in terms of security—should a country be subject to a cyberattack, or suffer a natural disaster that disrupts the power network—and financial transactions nationwide.
As in neighbouring Sweden, Norway’s government recognises the essential nature of cash for national stability, prompting its move to preserve the circulation of banknotes and coins despite the modest role they presently play in financial transactions.
Cash serves important functions in the payment system, and so we are taking measures to make sure it remains available and accessible.
The cash defence plan set in motion by the government will be initialised in autumn, with the FSA being given a deadline of 3 September to prepare a response.