Sweden’s Central Bank Calls for Immediate Pro-Cash Legislation

Sveriges Riksbank—Sweden’s Central Bank—has called for legislation on cash ‘to be tightened up immediately’ to ensure Sweden’s economy is resilient and inclusive.

The Riksbank explains in a press release that its role is to help ensure the nation enjoys a stable and efficient financial system, and that part of this is ‘ensuring that the public can make payments both in normal times as well as in peacetime crisis situations and elevated preparedness.’ Cash makes crucial contributions to all of these.

In normal times, physical money is needed to support financial inclusion, as it can be used by people of any age, any technical ability, and by those who do not have a bank account, or access to cashless payment options. It also offers the wider community choice and privacy, with no transaction tracking, whilst contributing to competition within the payments sector as the only not-for-profit option.

During crises—for example a natural disaster, or a deliberate attack on infrastructure—the electricity and internet required for cashless payments may be unavailable. For people to make essential purchases, and for businesses to continue operating, physical money is needed, since banknotes and coins require no infrastructure to function as an exchange of value.

The Swedish government mandated the Riksbank with conducting a broad analysis of the payment market, including ‘taking a position on the significance and need for certain means of payment to be legal tender’. The bank’s primary recommendation is to strengthen the position of cash in legislation, followed by preparing legislation for a digital currency to operate alongside cash.