Sweden’s Wake-Up Call Says Cash is Crucial in a Crisis
Oct 18, 2024
In a striking statement, the Central Bank of Sweden—a country considered a cashless pioneer—says cash is key to national resilience and advises citizens to use it regularly to ensure it’s available in crises, when digital payments fail.
In a video on the Sveriges Riksbank website, Governor Erik Thedéen provides tips on financial measures individuals can take to be better prepared for crisis and war. He highlights the importance of being ready to use a variety of payment methods, such as holding accounts with different banks and cards from different companies.
Cash is another alternative that can be an important means of payment in a crisis, when digital payments do not work. At the Riksbank, we believe everyone should be able to buy socially important goods with cash, for example food or medicine. If you also think this is important, then pay using cash.
Governor Thedéen recommends people ‘use a little [cash] every so often’ to clearly indicate demand for cash to businesses. He says this will ‘increase their willingness to preserve the [cash] system for use on a daily basis, but also in a crisis.’
The advice is in line with recent calls from the central bank for clarification and tightening of the legal requirements around banks supplying cash services, which described those currently on offer as ‘inadequate’. It also follows a Bloomberg article exploring how financial crime has surged in Sweden, bolstered by digital transactions, prompting moves to reintroduce the balancing effects of cash.