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Cashless Sweden And Coin Collecting

 
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Valued Member
United States
299 Posts
 Posted 10/09/2016  02:03 am  Show Profile   Bookmark this reply Add PacoMartin to your friends list Get a Link to this Reply
It was my understanding that the negative interest rates associated with the "deposit rate" in Sweden only applies to cash.

In Sweden Banknotes and coin held by banks is dropping 3.5x times faster than Banknotes and coin in circulation outside banks

At any rate here are the metrics in local currency for different currencies (sweden, USD, GBP, Euro, Switzerland, Japan).I also indicated SEK and JPY in USD.

Banknotes and coin held by banks (per capita)
year	Sweden	USA	UK	Euro	CHF	JPY
2011	850 kr	$232	90	167 	966	67,089
2012	780 kr	$252	86	182 	960	63,997
2013	348 kr	$257	72	181 	972	74,617
2014	370 kr	$279	106	187 	1019	75,332
2015	195 kr	$263	80	185 	962	75,183

Banknotes & coin held by banks in Sweden and Japan using then year x-rates (per capita)
year	Sweden 	~JPY
2011	$123	$866
2012	$120	$743
2013	$54	$711
2014	$48	$630
2015	$23	$624
So while Sweden never held much cash in banks relative to other countries, since the government imposed negative interest rates, the cash held by banks has dropped precipitously.

If I am not being clear, the general economic rule is that zero or negative interest rates usually mean people head to cash instead of banks. Sweden is bucking the trend partly by allowing the banks to avoid cash (outside of their ATMs) so that they have limited ability to get large denominations or large amounts of cash.

It's partly changes that are this abrupt to go from $120 to $54 in one year for banknotes & coin held by banks in Sweden that makes me loathe to call this change consumer demand driven. Personal habits change relatively slowly. But the bank is highly motivated to stop dealing in cash because of negative interest rates. I feel like there is a demand element since people get used to apps like SWISH, but I believe a lot of the change is coming from the government down down to the people.
Edited by PacoMartin
10/09/2016 10:52 am
Pillar of the Community
Sweden
1027 Posts
 Posted 10/09/2016  09:45 am  Show Profile   Bookmark this reply Add X2an to your friends list Get a Link to this Reply
Don't know how much negative interest rates affect the amount of cash carried by banks, but lately (since around 2009), bank offices have stopped carrying cash and I suppose that would explain the enormous decrease.

Also:

Quote:
Now they are developing "contactless cards" that will permit Swedes to make purchase of up to 200kr without entering in a Personal Identification Number.


I actually happen to have such cards although I didn't order them as such. It's something my bank uses when issuing new cards, and I have never used that function.
"Always assume the lowest in value for best possibilities"
Valued Member
United States
299 Posts
 Posted 10/09/2016  11:12 am  Show Profile   Bookmark this reply Add PacoMartin to your friends list Get a Link to this Reply
https://en.wikipedia.org/wiki/Conta...#Floor_Limit

I suppose there are two different things. One is a "floor limit" which is the amount below which you don't have to sign or enter a PIN. In the USA that varies from retailer to retailer but places like home depot will typically permit up to $50. On the other hand "Home Depot" is not typically a place where someone will take a stolen credit card.

The second thing is the "contactless payments" which makes some people nervous. They turn off the function on their card. People are afraid of RFID chips.

Banks stopped carrying cash in Sweden for a variety of reasons. The one that is usually promoted is that it cuts down on bank robberies and makes it safer for bank employees.

But cash is inherently expensive to handle. You need people to count and recount, you have to lock up cash drawers, and petty thievery is always an issue. It's basically time consuming task with no real opportunities to add fees. The negative interest rates simply make cash even more expensive to handle.

I understand that Denmark is discussing doing away with cash machines in some retailers. I don't know if Sweden is also talking about doing the same thing. In the USA the problem of locking up a bar at 1AM and taking a pile of cash to the ATM for deposit is very risky.

Some high end retailers and occasional restaurants refuse to accept cash in the USA. Most apartment rental companies refuse to accept cash. A lot of gas stations will only accept up to $20 banknotes, and they are deposited into a safe onsite which the employee cannot get into. They display a large sign to that effect to discourage armed robbery.
Valued Member
United States
299 Posts
 Posted 06/15/2019  5:00 pm  Show Profile   Bookmark this reply Add PacoMartin to your friends list Get a Link to this Reply
It looks like Riksbank has slammed the breaks on the rate at which cash was vanishing in Sweden.

It's been 32 months since the new 50kr, and 100kr banknotes were issued, meaning that all denominations of banknotes had been replaced.

The total amount of Cash in Circulation has dropped only 1.1% per year on average (banknotes only) in those entire 32 months

Maybe Riksbank has decided that you need a certain minimal amount of cash to keep the infrastructure functionioning, or else they are waiting for the e-krona.

Circulation is about 205 million banknotes for a country with a population of roughly 10 million. Banknotes are under contract to be produced by De La Rue in Britain. Personally, I think this will be the last series of banknotes issued by Sweden. In 10-15 years when you might normally issue a new series, cash will probably be so unimportant that counterfeiting is no longer a serious threat to society. On the other hand if you are not afraid of counterfeiting, then they might issue this series for another half a century.
Edited by PacoMartin
06/16/2019 01:04 am
Valued Member
United States
299 Posts
 Posted 07/12/2019  2:09 pm  Show Profile   Bookmark this reply Add PacoMartin to your friends list Get a Link to this Reply
Now it has been 33 months since the new 50kr, and 100kr banknotes were issued, and the cash supply of valid banknotes is actually slightly higher than it was 33 months ago.

While not a significant change, it does show that the march to cashlessness may not necessarily be pre-ordained. Society may simply want a minimum amount of cash.

Personally, I don't think the e-krona is going to kill cash. It will just be another type of electronic money. Please state otherwise if you disagree.
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75010 Posts
Valued Member
United States
299 Posts
 Posted 07/28/2019  02:47 am  Show Profile   Bookmark this reply Add PacoMartin to your friends list Get a Link to this Reply
53.939 SEK billion Sept 2016 valid banknotes only
53.967 SEK billion June 2019 valid banknotes only

I was on a Caribbean island that was hit by a hurricane and lost all power for weeks. The island naturally switched to a cash or theft economy, but of course many of us couldn't get cash from the ATMs. We had to depend on the cash we were carrying to eat.

If the same thing were to happen in Sweden, it seems like many people don't have any cash on their person at all.

It looks like Swedes don't think about natural disasters much as they don't really have earthquakes or hurricanes.
Julorkanen 1902 was a strong European windstorm which struck Denmark and Sweden on 25 December 1902. Circa 50 fishermen were killed, while very few people on land were killed.
Edited by PacoMartin
07/28/2019 02:54 am
Pillar of the Community
United States
2237 Posts
 Posted 08/01/2019  9:34 pm  Show Profile   Bookmark this reply Add tdziemia to your friends list Get a Link to this Reply
I continue to find this topic very interesting not just from a hobbyist viewpoint, but also from history/economics viewpoint.

I have only two anecdotes to add, no real data. I spoke with someone recently back from a holiday in Sweden who did notice the absence of cash in transactions there. And on a recent one week trip to France, I used cash only once: to buy bus tickets on my next to last day.


Quote:
I was on a Caribbean island that was hit by a hurricane and lost all power for weeks. The island naturally switched to a cash or theft economy, but of course many of us couldn't get cash from the ATMs. We had to depend on the cash we were carrying to eat.
If the same thing were to happen in Sweden, it seems like many people don't have any cash on their person at all.

I do think about this possibility for the U.S. Power failures for some hours or even days are common. Not just due to disasters, but also to lack of maintaining the grid, and in the future perhaps for sabotage. Of course there is an entire industry that makes money from publicizing this possibility, but I feel it is common sense to have some amount of cash in small bills on hand. Of course that assumes you are able to make purchases where the clerk can actually do some basic math by hand.
Edited by tdziemia
08/01/2019 9:40 pm
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 Posted 08/02/2019  1:55 pm  Show Profile   Bookmark this reply Add jbuck to your friends list Get a Link to this Reply

Quote:
I do think about this possibility for the U.S. Power failures for some hours or even days are common... Of course there is an entire industry that makes money from publicizing this possibility,
Generator sales are up, up, up.
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