Payments Report 2021

The position of cash as legal tender needs strengthening

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Further political decisions are required to safeguard the entire cash infrastructure and cash as a means of payment

Published: 3 November 2021

The new legislation increases the requirements of the banks to supply cash services and the proposed depot responsibility contributes to safeguarding parts of the cash infrastructure. However, these measures are not enough to ensure the entire infrastructure or safeguard the possibility of paying in cash. The act, that came into force in January only deals with private persons’ possibilities to withdraw cash and companies’ possibilities to deposit, and the proposed depot responsibility only safeguards the wholesale part of the cash supply chain. Further measures are needed to protect the groups that do not have access to digital payment possibilities or manual cash services, but who still need to use cash to manage their finances. Moreover, measures are also needed to ensure that necessary parts of the infrastructure are retained and can function.

If cash is to be used in the future, private persons’ right to pay in cash needs to be protected. The Riksbank has pointed out that it should be possible to use cash to buy goods and services essential to society and that this is best ensured by giving it stronger protection as legal tender (see FACT BOX – The position of cash as legal tender). Further, private persons need to have the possibility to exchange between digital money and cash. The Riksbank has pointed out that the banks need to give private persons the same possibilities to make deposits as have been legislated for withdrawals. It is particularly urgent to introduce measures to give the general public the opportunity to deposit coins in an account as there is at present very little opportunity to do so. Moreover, one needs to meet the needs of those who for various reasons need to use manual cash services to manage their personal finances.

FACT BOX – The position of cash as legal tender

According to the Sveriges Riksbank Act, banknotes and coins are so-called legal tender that households and companies must be able to use to make payments. However, there are substantial exceptions from the obligation to accept cash. Firstly, it is often possible to waive the obligation by agreement. This applies both in private enterprise and in such public sector operations that can be equated with private enterprise, for instance, municipal car parks. Secondly, there are exemptions in a number of acts, for instance, tax legislation, which means it is not possible to pay in cash. The obligation to accept cash is therefore relatively limited, and applies only in a few areas, for example, within the publicly-financed healthcare system. As households and companies cease using cash, it will become more and more difficult for those who need to pay in cash.

To ensure that the possibility to pay in cash can be maintained in various contexts, the Riksbank wants the position of cash as legal tender to be reinforced. By this, one means that more instances in society should be obliged to accept cash. The question of whether certain means of payment need to have the position of legal tender and the question of whether the content of the expression legal tender should be changed are currently being investigated as part of the so-called Payments inquiry (see Digitalisation has raised the question of the state’s role on the payment market). The inquiry’s remit also includes proposing potential legislative amendments or other measures.