Payments in Sweden 2020

Swedish banknotes and coins – the Riksbank's new responsibility for cash handling

The Riksbank will presumably have greater responsibility for cash

Published: 29 October 2020

At the end of last year, a new Sveriges Riksbank Act was proposed. According to the proposal, the Riksbank is to have overall responsibility for access to cash across the entire country. Among other things, this means that the Riksbank has the responsibility of ensuring there are depots across the entire country, which is to say places where banknotes of all denominations can be collected and deposited.

The Riksbank Committeés proposal for the division of responsibility in the cash supply
Part of the cash chain Responsibility
Issuing cash
(Issue, redemption and destruction)
The Riksbank
Cash handling wholesale
(Depot operations)
The Riksbank
Cash handling retail
(Cash transport, counting services, sales to end customers etc.)

Banks
Necessary conditions to meet legal requirements on reasonable access
The Riksbank
Surveillance, analysis, contingency

Access to cash services
(Cash withdrawals, daily takings)

Banks
Legal requirement for reasonable access
State
Surveillance and support measures

Source: SOU 2019:46, Figure 34.1.

The Riksbank Committee proposes that there be depots in at least five places in the country, at least one of which must be in Norrbotten or Västerbotten county and at least one in Jämtland or Västernorrland county. However, the Riksbank does not have to run these depots itself. According to the proposal, fees, opening hours and other conditions for deposits and withdrawals should not be less generous than today.

Cash handling does not just cover depot operations but also cash transport, banknote counting and sorting, banknote sales and so on, making it possible for banks and others to offer cash services to their customers. The Riksbank Committee proposes that the Riksbank monitors and analyses cash handling and reports back on this to the Riksdag Committee on Finance, as well as, when necessary, taking a coordinating role. The Riksbank’s coordinating responsibility means overall systemic responsibility for cash handling as a whole in Sweden, including when problems arise in cash handling. For example, one such problem could be that one of the central companies Bankomat AB or Loomis winds down its operations across parts or all of the country. If the problems concern access to basic payment services in a specific area, responsibility instead falls to the Swedish Post and Telecom Authority and county administrative boards.

According to the Riksbank Committee’s proposal, under heightened alert, which is to say during war or under threat of war, each and every person will have the right to pay with cash and special contingency money issued by the Riksbank, unless otherwise stipulated by another regulation. This right is unconditional and cannot be restricted. The inquiry says that demand for cash can be expected to increase heavily during wartime, placing special demands on manufacturing capacity and storage. Storage may therefore have to take place on a larger scale and in a less centralised way than normally.

In its consultation response, the Riksbank has agreed it is reasonable for the Riksbank’s responsibility for cash handling to be clarified. However, there must be flexibility in how the Riksbank is to fulfil its assignment, otherwise the risk that cash handling is not organised efficiently will arise. It is therefore inappropriate to legislate for how many depots there must be and where these must be situated.

Fact box: The position of cash as legal tender

According to the Sveriges Riksbank Act, banknotes and coins are legal tender and consequently must be possible to use to make payments. However, there are far-reaching exceptions from the obligation to accept cash. Firstly, in some cases, it is possible to waive the obligation to accept cash. This applies to both private businesses and such public sector activities as can be likened to private businesses, such as municipal parking places. Secondly, exceptions can be made in law, for example as has been done in tax legislation. The obligation to accept cash is therefore relatively limited and applies only in a few areas, for example within the publicly financed health care system. As people reject the use of cash, it is becoming more and more difficult to pay in cash. However, cash has an important function for preparedness in society.

The Riksbank therefore wishes to strengthen the position of cash as legal tender. By this, the Riksbank means that there should be a greater obligation to accept cash in society. However, the Riksbank Committee has not put forth any such proposal. On the contrary, it proposes that the obligation for certain public sector operations, such as public medical care, to accept cash should be removed. Implementing the Committee’s proposals would therefore mean that protection for cash would be weakened in relation to the present situation. This is unfortunate as there are groups in society who live in both financial and digital exclusion. They need both to be able to withdraw cash and to pay with it. It is therefore reasonable to require cash to be accepted by public authorities, municipalities and publicly-owned companies that supply important services to society, for example, as well as private companies selling essential goods and services.