Economic Commentary: Does cash have a future as legal tender?


In Sweden we are used to being able to use cash to pay, for instance, in a shop or a restaurant. However, cash is used relatively little in this country in relation to most other countries and its use is constantly declining. The authors of this Economic Commentary analyse the legal status of cash and propose that it should be put on a par with other methods of payment.

Cash holds a special legal status as legal tender according to the Sveriges Riksbank Act. In practice, this means that a person making a payment has the right to pay in cash unless otherwise agreed.


However, it is increasingly common that businessmen do not want to accept cash in payment, while the general public often regards it as a right to pay in cash. This difference in the view of cash as legal tender may increase in the future, as fewer points of sale are expected to accept cash. It is at the same time very likely that the use of cash will continue to decline in Sweden as our payment behaviour changes and new payment services are developed.


Before any changes are made, the authors consider it would be wise for legislators to investigate thoroughly whether a new and technology-neutral regulation may be needed in the longer run, to determine the method of payment when there is no agreement on this and if there are situations where cash must be used.



By Björn Segendorf and Anna Wilbe

The authors work in the Financial Stability Department at the Riksbank.

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