Swedish government expected to pass law requiring all banks to handle cash

March 25, 2019 Share Source
To the surprise of all those assuming Sweden would lead the way to a cashless future, the Swedish government is now expected to pass a law making it mandatory for all banks to handle cash.

So, why is 'the world's most cashless country' recommitting to the most tried-and-tested payment form with this new legislation?

A recent interview with Bloomberg discusses how the move comes in response to various reports warning of the consequences in abandoning cash. Cashless systems are vulnerable to blackouts, glitches and hacker attacks, thus endangering individuals and society to immediate economic collapse.

On June 4th, 2018, Riksbank governor Stefan Ingves, compared monetary policy to health, explaining how when it works one doesn't think about it, but when it fails, it's all one can think about. In relation to cash access, Ingves believes that the same mentality applies.

"If the power supply is cut it's no longer possible to make electronic payments. For reasons based purely in preparedness we need notes and coins that work without electricity."
" Stefan Ingves Governor Riksbank

While a cashless system might work most of the time, it may not work for everyone at any time. Concern for the needs of the elderly and the handicapped who rely on cash has also weighed into the decision-making process regarding whether a dash to cashless is too rash.

Then there are the people who simply want to maintain the option to use cash. A survey by Sweden's leading ATM provider last year, found that 7 in 10 Swedes do not want to lose the option to use cash.

“There may be some changes, but mainly, what we proposed will be carried out...There’s a broad majority for this, so I expect it will happen.”
" Fredrik Olovsson, a key lawmaker for the ruling So A key lawmaker for the ruling Social Democrats As quoted by Bloomberg (Mar 24, 2019)

Excerpts from Bloomberg article

The legislation is a response to Sweden becoming one of the most cashless societies in the world, with bank branches not offering money withdrawals and stores not accepting cash. Some people are finding it difficult to cope without access to mobile phones or bank cards. There are also fears around what would happen if the digital payments systems suddenly crashed...

...The central bank has argued that the plan doesn’t go far enough, and that all banks should be forced to handle cash. It also has support among the opposition.

Emil Kallstrom, a lawmaker for the Center Party, said that "my understanding is that all parties stand behind the proposal, so I don’t see why the government should wait any longer with presenting it.”

Read full article here

Last Updated: April 18, 2019