STOCKHOLM, (Reuters) – Sweden’s transformation into a cash-less society is going too fast and new regulation is needed to make sure cash remains accepted and the central bank retains some control over payment systems, Riksbank Governor Stefan Ingves wrote in an opinion piece on Monday.
Sweden is one of the most cash-less societies in the world, and many shops, restaurants and even bank branches refuse to accept cash payments. In just over 10 years Sweden has halved its cash in circulation to 50 billion Swedish crowns ($6.14 billion) from 112 billion.
“In fact, if nothing is done, Sweden is heading for a situation where all means of payment that the public has access to are given and controlled by commercial actors, while we also see the emergence of new so-called electronic currencies of varying kinds,” Ingves wrote in an article published in Daily Dagens Nyheter.
Swedish banks have developed Swish, an app enabling customers to send money and make payments in real-time, free of charge, around the clock, using only their phones. More than six out of 10 Swedes use Swish, and it has sped up the decline of cash transactions. The central bank is currently evaluating an e-crown, a digital version of cash guaranteed by the state, but Ingves urged lawmakers protect the long-term status of Swedish kronor issued by the Riksbank, partly by forcing banks to handle cash.
“There are those who mean that we have nothing to fear in a world where public funds have been completely replaced by private options. I think they are wrong,” Ingves said, adding in times of crisis the public always wants risk-free assets, like cash, that are guaranteed by the state.
“That commercial players in all scenarios would shoulder the responsibility to meet public demand for safe payments is unlikely,” he said.