Sweden Grapples With Rapid Cashless Transformation...Banks Forced to Offer Currency?
Sweden Seen Likely to Force Banks to Handle Cash
Transactions
Amanda Billner March 24 2019, 11:07 AM March 24 2019,
10:38 PM
(Bloomberg) -- Sweden will likely push through a proposal
to force banks to keep offering cash to customers who require it as the Nordic
nation grapples with how to balance the rapid transformation into a cashless
society.
Key lawmakers said in interviews over the weekend t*hat
the government will probably seek to enact proposed legislation that had been
roundly criticized by the banking industry and called potentially illegal.
“There may be some changes, but mainly, what we proposed
will be carried out,” said Fredrik Olovsson, a key lawmaker for the ruling
Social Democrats. “There’s a broad majority for this, so I expect it will
happen.”
Olovsson is part of a committee that’s reviewing the
central bank law, which proposed last year to make it mandatory for banks that
provide checking accounts and have more than 70 billion kronor ($7.6 billion)
in deposits from the Swedish public to offer cash withdrawals and handle daily
receipts.
The legislation is a response to Sweden becoming one of
the most cashless societies in the world, with bank branches not offering money
withdrawals and stores not accepting cash. Some people are finding it difficult
to cope without access to mobile phones or bank cards. There are also fears
around what would happen if the digital payments systems suddenly crashed.
But the Swedish Bankers’ has said that the plan to make
just a few banks responsible for providing cash could be in breach of European
Union rules. The competition authority and financial watchdog have also come
out against the proposal, arguing, respectively, that it would distort
competition since it only affects some banks and that securing access to cash
should be a responsibility of the state.
The central bank has argued that the plan doesn’t go far
enough, and that all banks should be forced to handle cash. It also has support
among the opposition.
Emil Kallstrom, a lawmaker for the Center Party, said
that "my understanding is that all parties stand behind the proposal, so I
don’t see why the government should wait any longer with presenting it.”
Olovsson said that banks need be responsive to customers
and there’s little time to look for other solutions since then “cash will
disappear.”
But the Riksbank committee’s proposal came in June last year
after the government had already rejected a plea from the central bank to force
cash handling amid legal concerns.
The cabinet of Social Democrats and Greens declined to
comment on the final shape of the legislation. But it confirmed it will submit
a proposal to the Council on Legislation this spring before presenting it to
parliament in the fall, said Frida Farlin, a spokeswoman for Financial Markets
Minister Per Bolund.
©2019 Bloomberg L.P.
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