Sweden’s central bank is advising households to keep the equivalent of approximately $95 USD in cash on hand, a recommendation that reflects growing anxieties about economic disruptions and payment system vulnerabilities. The unusual guidance from the Riksbank comes as Sweden rapidly transitions to a cashless society, a trend that has left the country particularly exposed to potential disruptions from cyberattacks or geopolitical events.
Over the past decade, cash has become increasingly stigmatized in Sweden, largely associated with criminal activity. Individuals using paper money for everyday transactions have often been met with suspicion. For many Swedes, interaction with coins and bills is now limited to redeeming deposit refunds. It’s estimated that only about one in ten retail purchases are currently made with cash.
This shift towards digital payments has created a reliance on electronic infrastructure, prompting the Riksbank to urge citizens to maintain a small cash reserve as a precaution. The recommendation follows similar concerns raised after Russia’s full-scale invasion of Ukraine in 2022, when anxieties about potential disruptions to financial systems spiked. The move underscores the importance of maintaining a baseline level of financial resilience in an increasingly digital world.
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Public trust in the Riksbank tends to fluctuate with economic conditions. According to a recent report by the SOM Institute, confidence is typically lower at the onset of an economic crisis but increases as stability returns. This pattern was observed during both the 2007 financial crisis and the early stages of the COVID-19 pandemic.
In early 2020, as interest rates hit record lows, only 8% of Swedes expressed low confidence in the Riksbank. Two years later, as rates began to rise, that figure jumped to 20%. Confidence is now gradually increasing again. This sensitivity to economic shifts highlights the importance of maintaining public trust in monetary policy.
While the Riksbank’s recommendation may seem unusual, it aligns with broader preparedness guidelines from agencies like the Swedish Civil Contingencies Agency. These agencies have long advised citizens to maintain reserves of essential goods and prepare for potential disruptions, such as power outages. The advice reflects a growing awareness of the require for resilience in the face of unforeseen events.
Johanna Schreiber is a writer for the Liberal News Agency.
Photo: Liberal News Agency
Major Swedish grocery chains and pharmacies have robust “offline” payment solutions in place to handle transactions even if internet service is disrupted. These systems typically allow customers to insert their chip cards into payment terminals rather than using contactless payment. Most retailers also accept mobile payments via Swish, and support a variety of card networks.
While $95 may not cover a full tank of gas, given current fuel prices and potential disruptions like those affecting the Strait of Hormuz, the Riksbank’s recommendation is part of a broader strategy to enhance national preparedness. The guidance, coupled with advice from agencies focused on societal safety and security, aims to ensure citizens are equipped to navigate potential challenges to the financial system.
Maintaining a small cash reserve may offer a sense of security, but Sweden’s advanced digital payment infrastructure provides numerous alternatives. The focus remains on ensuring access to reliable payment methods, even in the face of unforeseen circumstances.
