As the country that is considered the most likely to go cashless in the near future, Sweden is facing some serious challenges in regards to payments and the role of government.
Originally written in Swedish on February 27th, 2018, Sveriges Riksbank’s Governor Stefan Ingves voices his concern about current developments in Sweden’s payments landscape. For Ingves, the payment system is a public good. As such, it falls into the same category as a number of other fundamental services. These, he believes, are meant to be run by the public sector for reasons including national security and information bias and legitimacy. “Most citizens would feel uncomfortable with handing over these public services [armed forces, judicial system and official statistics] to private companies entirely,” he explains.
The main issue at hand is that the Nordic country’s current speed of transformation is so fast, that the central bank hasn’t been able to adapt accordingly. Ingves calls out for a modernized, around-the-clock payment service to avoid current settlement delays and for an immediate alignment of the Riksbank Act with other legislation to better protect the country’s currency, the kronor. Indeed, a parliamentary commission for a new Riksbank Act is being setup.
Fully aware of the transformation at hand, Ingves warns against a takeover of the country’s currency by the private sector. “In times of crisis, the general public has always sought refuge in risk-free assets, such as cash, which are guaranteed by the state,” writes Stefan Ingves. In fact, he deems commercial agents unfit to safely and responsibly manage payments when things go sour and sees a potential dependency on these private actors as a national security risk.
To read the translated version of Ingves’ opinion piece, please click here.