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.
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