Wednesday, February 28, 2024

Polaris of Enlightenment

Wednesday, February 28, 2024

Polaris of Enlightenment

A cashless society: Less and less cash in circulation in Sweden

The war on cash

Published 15 January 2024
- By Editorial Staff
Cash use continues to decline.

The use of cash as a means of payment continues to decline in Sweden. In November, the share fell to just 1.2%, and economists believe that the physical Swedish crown (krona) may soon be “scrapped forever”.

In 2009, around 100 billion in cash was in circulation during December, a figure that has now fallen to a third during Christmas 2023. The proportion of total liquid assets has also fallen dramatically.

Robert Bergqvist, senior economist at major Swedish bank SEB, says this is a natural part of increased digitalization, but that it poses challenges for those who cannot use electronic money.

– The next wave of digitalization could increase the pressure to get rid of the krona for good, he tells Dagens Industri.

Digitalization is also taking place in other countries, but despite this, Sweden has been described as an “extreme case” when it comes to phasing out cash, including by the financial magazine Blomberg. A study by the University of Gothenburg last year showed that many Swedes want to keep cash in society, with 53% saying that a legal requirement to be able to pay with cash is a good thing.

At the same time, it is becoming more and more difficult to pay with cash in society, for example, the Stockholm department store NK has decided to stop accepting cash payments in 2023. The Swedish Tax Agency received a complaint from the Parliamentary Ombudsman last spring after refusing to accept cash payments.

E-currency risky

Today, digital payments are made with digital bank IDs issued by the banks, and there was an inquiry into whether to introduce a digital central bank currency, or e-krona, which would be issued by the Riksbank (Sweden’s central bank) instead of the private banks. The investigation said no to the e-krona today, but it will continue to be investigated by the Riksbank for the future.

– One risk I see is that an e-currency could drain liquidity from the entire banking system if there is turmoil in the financial system, if customers could move their money quickly and digitally to the central bank, says Bergqvist.

Despite the low proportion of notes and coins in circulation, one in four Swedes said last summer that they usually carry cash.


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