Sweden's New Banknotes

I am completely aware that Scandinavia is not America. It is a very common debate here as Scandinavia is brought up frequently in political discussions.

I have no doubt that Swedes are happy in many cases to adopt electronic payments, even for roadside stands. Perhaps more than established stores, street venders have more to gain from electronic payments because they have greater security worries and it is more difficult to make change.

But people are people everywhere. The urge to keep a little money in a floor safe in your home is a very strong one. The desire to have a nontraceable transaction is also a basic human desire.

There is a big discrepancy between Sweden and Norway in the amount of circulating cash considering Sweden has so many more people than Norway.

Valid Banknotes only (not coins)
44,258 million SEK
44,726 million NOK
64,321 million DKK

I just don't think you can attribute all of that to the "cash is for Fred Flintstone" idea.

I truly believe that with 45 million 1000SEK banknotes at the end of 2005, the Riksbank deliberately produced only 10 million 1000SEK banknotes with the security strip which were introduced in March 2006. I can't prove it since production statistics are not public. That was the first in a series of moves designed to reinforce behavior.


What about the other 6 currencies in countries part of the EU? It sort of makes sense for them to accelerate transitioning to digital currencies. If for no other reason than it will make the transition to the Euro much easier. If they never transition, it just makes more sense to not be shackled to physical currency that is only usable in such a limited area.

Croatian kuna 2,000 € Per Capita
Czech koruna 1,967 € Per Capita
Polish z#322;oty 1,389 € Per Capita
Hungarian forint 1,243 € Per Capita
Bulgarian lev 889 € Per Capita
Romanian leu 870 € Per Capita

Valid Banknotes only (not coins)
44,258 million SEK @ 10 million population
44,726 million NOK @ 5.2 million population
64,321 million DKK @ 5.7 million population
DKK is 29% more than SEK
NOK is 1% more than SEK

BIS Currency GDP% USD-2015 (per capita)
Japan		19.44%	$6,738.65
Hong Kong SAR	15.51%	$6,550.01
India		12.25%	$195.48
Switzerland	11.76%	$9,213.47
Euro area	10.63%	$3,570.81
Russia		10.56%	$799.51
Singapore	9.55%	$4,910.88
Saudi Arabia	8.20%	$1,708.47
United States	7.90%	$4,433.23
Mexico		6.84%	$598.78
Korea		5.56%	$1,460.33
Turkey		5.37%	$457.94
Australia	4.65%	$2,319.93
Canada		4.08%	$1,641.02
Brazil		3.82%	$282.42
United Kingdom	3.72%	$1,583.28
South Africa	2.39%	$113.36
Sweden		1.73%	$872.15

"Cash Hating" could mean you might very well do every single transaction electronically and keep 10,000kr in your home safe.

Norway has much more cash "per capita" than Sweden since it has a little more than half the population. Denmark has as much cash circulating as UK or Canada. So Danes can easily keep some money at home.

In my thinking the issue of keeping money at home and being able to make private transactions is a bigger one than how you pay for your strawberries.

The proposed digital currency for Sweden may be perceived as a direct threat to commercial banks. I suspect that the national conversation may actually become vitriolic as commercial banks run campaigns.

The relative technological backwardness of the 6 other EU countries may not stop them from adopting digital currencies. In reality, I could see them having a great deal to gain. In South America, Ecuador is a very poor country with only a 95% literacy rate, but they are pursuing digital currency more than any other nation in the Americas.

There are many people who claim that physical cash can be used to be more frugal. They point to the super high debt-to-income ratio in Scandinavia as an example.

The ranking is ambiguous, at best.

Business Insider: Eurostat compared total debt per household, compared to the average income per household to produce a debt-to-income ratio. It's that data we've used to generate a ranking of the European countries where people have the most debt.
10. Finland — 109.97%. Mortgages make up a particularly large proportion of the household debts held by Finns. According to the country's statistical agency, the average housing loan in Finland is 181% of annual household income.
9. Spain — 112.3%. Earlier in March, the European Commission warned that Spain's economy is being weakened by "large stock imbalances in the form of external and internal debt, both public and private." Household debt plays a huge role in that weakness.
8. Portugal — 116.39%. Towards the end of 2015, total combined debt in Portugal reached 360% of the country's GDP.
7. United Kingdom — 125.87%. According to data from the Money Charity, households in the UK hold an average of £54,080 of debt right now.
6. Sweden — 148.68%. Household debt in Sweden is on the rise which, according to the IMF, is helping fuel a growing housing bubble in the Nordic state. Sweden's economy is currently being defined by persistently low inflation, something the country's central bank is trying to combat with negative interest rates
5. Ireland — 179.55%. Ireland's household debt burden is actually falling at the minute, dropping to €33,530 per capita at last estimate, however, that's nearly twice the average disposable income in the country.
4. Norway — 187.47%. Norway may often by cited as the most prosperous nation on earth, but that doesn't stop its average citizens from being heavily indebted.
3. Cyprus — 202.45%. Cyprus is one of just three countries in Europe to have a debt-to-income ratio for households of more than 200%.
2. Netherlands — 214.45%. Estimates from the Netherlands' national statistical agency put the total debt held by Dutch households at more than €740 billion last year, around €100 billion less than the country's total GDP.
Laurent Dubrule/Reuters
1. Denmark — 265.11%. Standing head and shoulders above the rest of Europe, Danes have by far the most debt of anyone on the continent, and in fact, the world. However, the governor of the Danish central bank, Lars Rohde isn't worried. In a 2014 interview he said that the threat to financial stability posed by high household debt is "not serious."

http://www.businessinsider.com/euro...right-now-17

First of all, I find it odd, strange and also hilarious that a democratic country of the First World in this day and age feels the number of coins and banknotes it produces for its own currency need to be a ''state secret.''
That begs the question ''Why?'' I think Riksbank has either very few banknotes in its vaults or a hole lot -- in both cases they don't want the public to know. Don't rattle the cage...

I can't recall where I found the environmental report on the internet as a PDF. Unfortunately, it is in swedish only. I don't speak swedish. A trading buddy who does informed me of the important stuff. The numbers speak for itself. I can email you the PDF if you want.
I think it's likley that the swedish bureaucrats made a mistake and the report with the production numbers got out ''by accident.''
Secondly, my guess is that the consulting firm that did the research looked at the environmental impact for the next five to ten years, perhaps even longer. So the number of coins is probably ''up to xx million minted'' as a projection by Riksbank for their needs for the next five to ten years. Considering production cost I think it's also entirely possible however that all the coins have already been minted and are sitting in bank vaults. Issued by demand which is obviously not that high in Sweden.
Depending on denomination 34--44% of the new coin production are already in circulation. I think that's not too bad for Sweden. I think it won't go higher than 70%. If it does, I would be surprised.
The Bundesbank -- responsible for cash in Germany -- overestimated the need for 50 Eurocent and 1 Euro coins here in Germany. They ordered millions of them between 2003--2005 (after the initial release in 2002). The coins of these orders were minted between 2003--2008. A lot of these coins are still in the vaults of the Bundesbank waiting to be released. Hence, there haven't been new orders for German 50 Eurocent and 1 Euro coins for 12 years!
By the way, the year on German Euro coins indicates the year the coins were ordered and NOT when they were actually minted -- except for the coins dated ''2002'' of course. They were minted between 1999--2002. But in contrast to France or the Netherland, all German coins of the initial release are ''2002'' only.

I think somewhat of a surprise is that the number of 500kr banknotes increased by 20% in the 6 months after the old notes were declared invalid on 30 June 2017. It's almost as if the banknote refused to be completely buried.

But circulation ended the year for Sweden at about 20 banknotes per capita with 25% being of the 20kr denomination. Circulation of the 1000kr is only token quantities, and value of circulating banknotes are 4600kr or roughly 460 Euros per capita.

Although the decision to issue an e-krona is technically still undecided, it seems unlikely that the Riksbank will go through this huge process and then decide not to issue an electronic currency. If for no other reason than the central bank will do it out of self preservation.

very good .. I like this notes

Riksbank decided to continue producing banknotes and finding a new supplier in De La Rue in the UK.

See:
https://www.riksbank.se/en-gb/press...te-supplier/

I just wish Riksbank would stop the secrecy regarding production numbers of their banknotes.

I wrote to Ron Delnevo and asked him about his article, and his response followed.
One of the great problems everywhere is the secrecy surrounding all things ATMs and cash. The less the public is told the better, seems to be the the general view of the "authorities".

The Swedish 1000SEK banknote designs
(1) 1894-1950 :"Mother Svea"/Gustav I/Vasa worth .9 lbs gold
(2) 1952-1973 :"Mother Svea"/Gustav V $192
(3) 1976-1988 : Karl XIV Johan $227
(4) 1989-1991 : Gustav Vasa $163
(4+) 2006 : Gustav Vasa (security strip added 2006)
(5) 2015-present :Dag Hammarskjöld



year millions of notes in circulation
1995 37.842
1996 38.637
1997 39.226
1998 40.999 31. Dec. 1998 Karl XIV Johan invalid $123
1999 46.791
2000 46.217
2001 48.358 peak circulation
2002 46.920
2003 45.652
2004 45.561
2005 45.292
2006 42.091 15. Mar. 2006 Vasa w/ strip intro $128
2007 38.648
2008 34.302
2009 31.367
2010 28.565
2011 25.090
2012 21.380
2013 9.709 31. Dec. 2013 Vasa w/o strip invalid
2014 6.160
2015 4.198 1. Oct. 2015 Dag Hammarskjöld valid $119
2016 3.299 30. Jun. 2016 Vasa with strip invalid
2017 3.494
2018 3.390

So the circulation of this note dropped from 40+ million to just under 10 million in 7 years. The Riksbank argues that the general public did not want the bills anymore.

But did the government produce 40 million bills with motion sensor strip and destroy them , or did they only produce 10 million bills with the strip?

If the former case is true it lends credence to the idea that the public rejected the higher denomination. However, if the latter is true, then the government was trying to phase out the 1000kr banknote.

By keeping production quantities a state secret nobody knows the answer.

Similarly the Hammarskjöld banknote is circulating in such small quantities as to be nearly invisible. Nobody know how many (if any) are in storage.