Sweden's New Banknotes

As this thread is getting long I am repeating some information so that it is readily available.
Ken Rogoff, Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University, says the US should get rid of the $100 bill (and $50s and $20s) proposing, in his words, "a 'less-cash' society, not a cashless one, at least for the foreseeable future."

Rogoff's begins by stating factoids as facts...




While it is a familiar argument, I have never seen someone include the US$20 banknote into the fight. As I have suggested simply limiting the new color $100 banknote to a trillion dollars seems to be an idea that the US government is incapable of handling.

But Sweden "a 'less-cash' society" which limits most of it's currency to the 200kr banknote might be in the near future.

Elimination seems to be too politically unpalatable (other than the 10,000kr banknote in 1991). The 1000kr banknote was circulating at over 48 SEK billion in 2001, and is currently circulating at under 3 SEK billion in September 2016.

So what will happen to the 39 SEK billion in 500kr banknotes by the end of next summer when they are all declared invalid?

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Banknotes and coins per capita at end of 2015 in USD-source Bank for International Settlements

$113 South Africa
$195 India
$282 Brazil
$458 Turkey
$599 Mexico
$800 Russia
$872 Sweden (As of Sep 2016 closer to Mexico)
<-------------------- Norway
<-------------------- Iceland (could be > Korea today)
$1,460 Korea
$1,583 United Kingdom
$1,641 Canada
$1,708 Saudi Arabia
<-------------------- Denmark
$2,320 Australia
$3,571 Euro area
$4,441 United States
$4,911 Singapore
$6,550 Hong Kong SAR
$6,739 Japan
$9,213 Switzerland

Norway and Denmark are not members of the Bank for International Settlement, so they don't have an official ranking. But I have shown where they would go if they were.

As I said Norway may try and follow Sweden when they issue their new banknotes. In particular the decision to change the 1000NOK banknote last and on 3rd year of changeover, even though it has the lowest circulation of any banknote makes me think they will either do away with it, or only issue token quantities like Sweden.

But Denmark just issued their new banknotes from 2009-2011. So if they were going to use that event to limit cash in circulation, they would have done it already.

It does seem lik 200SEK is small for even the poorest European countries
200PLN~450SEK Polish Zloty
200RON~431SEK Romanian leu (rarely used 500RON banknote)
100BGN~496SEK Bulgarian Lev

Asia, Africa and Latin America have very small banknotes
100CNY~131SEK Chinese Yuan
100BRL~276SEK Brazilian Real
10,000XOF~148SEK West Africa CFA Franc
10,000XAF~148SEK Central Africa CFA Franc


Mexico is functioning with the 500 peso note as their primary note (500MXN~233SEK). Over 70% of the banknotes by value are the 500 peso notes/ There is a 1000 peso banknote, but circulation is less then one banknote per capita, and it is very difficult to spend outside of Mexico City.

How about serial numbers? Seen any serial numbers over 1 million yet (i.e. any digit other than zero)? (first two digits are not part of the serial number, but are constrained to 1-50 and represent position on sheet).

More and more ATMs are officially dispensing the last new notes now and I think I saw a peek of a new 500 being given out at my local supermarket yesterday. I have yet to encoounter many myself but I haven't made much effort to get these lately. Still though most people seem to have and get pretty much only the old notes.

I'm not surprised. I've seen plenty of 20's around, much more than any other denomination. Sadly, it's still not uncommon to get 2 20-kr notes and a 10-kr coin instead of a 50-kr note. There are still some places that don't have the 200-kr note ready but they're becoming fewer.

Speaking of the 20-kr note, I still haven't seen any that have notable cuts or tears. Plenty notes I see in circulation have been roughly treated and folded in almost every way. One had a burnt corner but none have been badly torn or fixed with tape. An evident result of thicker notes, I'd say.

Also - the new 500 SEK note is becoming more common now, although it's still not very common by any means. I saw what I assumed to be some tourinsts with one today and the other day I was standing behind a person withdrawing what looked like stacks of them from the ATM! All of which were new ones. So there is still demand for these notes afterall.

I also had to spend a new 100 SEK note the other day, but the cashier didn't seem surprised of excited in any way.

Lastly, I was surprised the other day when I went to an ATM that didn't dispense 100 SEK notes, only 200's and 500's! First of its kind. I haven't heard anything from the company about doing this. The ATM didn't say it had run out of the notes, it straight out said it didn't dispense that note.

The Riksbank set the "Repo rate" at -.5% on February 17 2016. It had first reached negative numbers the year before.

On 2 November 2016 they bank stated in a Press Release:



So there is a high probability that the repo rate will be even lower than -.5% when on 30 June 2017, it will no longer be possible to pay using the old 100 and 500-krona banknotes.

The current stock (as of 31 October 2016) is 72.3 million of the old 500kr banknotes. In order to make it as difficult as possible to hoard value in cash, the Riksbank will have to replace a fraction of the old banknotes with new ones.

At some point vastly reduced withdrawal limits on ATMS will have to be enforced.

Although no one expects Sweden to adopt the Greek limit of 50 Euros a day maximum withdrawal amount (500SEK=50.57EUR). I wouldn't be surprised if 3000SEK becomes the new maximum withdrawal amount by next year.

The Swedish central bank is collecting information on a digital currency, the e-krona. Public opinion polls were fairly negative, as most Swedes do not see the need for another type of electronic currency.

But electronic transactions are also distinguished by their ability to be reversed in the case of payment disputes and their anonymity. In many cases people want "dispute resolution" and traceability to their transactions. But a digital currency may resemble a cash transaction in that it is both permanent and anonymous.

A transaction without any dispute resolution or traceability may be fundamentally less expensive. The Swedish government may see it as a way to counter the arguments of the final people who are against abolishing of physical currency. I suspect that there will be some limit to these transactions, possibly with a way to do an online form submitted to the government containing names of parties, date, location and purpose of transaction if you exceed that amount. The limiting amount would probably be no higher than 100,000 SEK, but could be considerably lower.

IMHO a minor modification of SWISH that would permit the user to download up to 10,000SEK to a digital wallet, and allow them to transfer some portion of that amount to another person anonymously might be a reasonable compromise. There would still be records of the downloads, but no records as to where the money was spent.

@X2an:
Thanks for the update on the new notes