Cash in the Swedish Payment System Today

Abstract

The use of cash in Sweden peaked in the end of 2007 and has been decreasing ever since (Table 1.1). The decrease in 2017 has been remarkable when looking at value of cash in circulation. The value of Swedish cash in the end of October 2017 was 26% (!) lower than in the end of 2016. The decrease since the peak in 2007 is over 50%. And it should be noted that this decrease is mainly a result of how the so-called market---banks, merchants, and consumers---supplies and demands cash. The main action by the state---or rather the Riksbank---in this period is to have decided that new bills and coins are introduced in the period from 2015 to 2017. When studying Table 5.1, it seems that the introduction of new bills and coins has had a negative effect on the use of cash where some of the decline is caused by the fact that all old cash is simply not returned to the central bank at all. There were cash with a total value of 8 billion SEK that had not been returned to the Riksbank by October 31, 2017, and thereby no longer were legal tender. This means that around a third of the decrease of cash in circulation was bills and coins that lost their status as legal tender in June 2017 but that nevertheless were not returned to the central bank. Despite this large temporary reduction due the new bills and coins, the decline was strong and critical.