Cashlessness May Have Gone Too Far in Norway, Government Warns
(Bloomberg) -- Norway’s government wants to make sure banks don’t stop providing cash, as the country becomes the world leader in abandoning physical notes and coins.
The Finance Ministry has told the Financial Supervisory Authority in Oslo to put together a plan that will ensure banks continue offering cash services, according to a statement on Friday. That’s after the FSA’s own survey found that a number of Norwegian banks “claim that they are not responsible for offering cash services.”
Banknotes and coins are used in only 3-4% of all transactions in Norway, the lowest level of cash usage in world, according to calculations by Norges Bank. Neighboring Sweden, another nearly cashless society, has also sounded the alarm amid concerns that the complete disappearance of paper money would pose a number of risks. The near obsolescence of cash has prompted central banks in both countries to explore their own digital currencies.
“There is a need to clarify individual banks’ duty to give customers the opportunity to deposit and withdraw cash,” the Finance Ministry said. That’s amid signs that banks are currently refusing to offer cash services on the grounds that “their customers do not have expectations of such an offer, and that the banks have specialized in other business areas,” it said.
Ida Wolden Bache, the deputy governor of Norges Bank, said that “cash serves important functions in the payment system and so we take measures to make sure it is still accessible and available.” Speaking in an interview with Bloomberg on Friday, Wolden Bache also said there are no plans to “abolish or stop supplying cash,” if a central bank digital currency were to be introduced.
In Sweden, legal changes requiring the country’s biggest banks to provide access to cash services entered into force in January. Last month, the Riksbank said it will triple the number of offices available to handle notes and coins.
Norway’s watchdog has until Sept. 3 to respond to the finance ministry’s request.
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