By Elisa Barwick

In recent years the European nations that had made the biggest inroads to becoming cashless societies have conducted hasty reversals. Nordic nations Norway, Finland, Denmark and Sweden have been most prominent but as AAS has reported previously, significant changes are underway in the UK, Ireland, Spain, Switzerland, the Netherlands and the entire jurisdiction of the European Union. One way or another, the moves are all oriented to securing cash payment options for citizens by forcing banks to provide access to cash and legislating mandatory cash acceptance for business.

This shift has come about as politicians have been forced to respond to reality and public pressure. World crises, popping up with increasing regularity, are worsened by the vulnerability of a financial system that excludes cash. The crises we face are the artefacts of a global financial breakdown which is driving its protagonists to war, and whether economic or war related, each new crisis propels the push to restore cash—to allow the economy to continue to function.

Swedish daily tabloid, 2022, the London Telegraph had
a similar headline in Nov. 2024. Photo: Screenshot

In recent months European newspapers have warned that cyber-attacks, scams and frauds, and energy and technology failures, could shut down entire nations, counting these problems among other “peril[s] of going cashless”. The Netherlands’ central bank chief has warned that the entire banking system is at risk.

Headlines have blared that going cashless has turned Sweden into a haven for criminals. Fortune magazine, for example: “Why going cashless has turned Sweden from one of the safest countries into a high-crime nation”. The June 2024 article reported that “Sweden is an important test case on fighting cashless crime because it’s gone further on ditching paper money than almost any other country in Europe. Online fraud and digital crime in Sweden have surged”. Financial crime has led to a surge in organised crime, including violence.

An April 2021 Bloomberg headline summarised a state of affairs now seen across Europe: “Cashlessness may have gone too far in Norway, government warns”. For all of these countries, the moves to restore cash represent a stark turnabout. Plagued by cyber-attacks, electricity disruptions, system glitches or financial meltdowns, digital methods have simply become unreliable. Even in Germany, where 60 per cent or more of all transaction are made in cash, a payment system outage in June 2022 catalysed a massive popular surge towards cash.

Numerous such disruptions paralysed European nations over the course of 2024, in addition to the global CrowdStrike outage in July which crashed Microsoft systems, halting payments, retail operations and crucial economic functions. Central banks have started advising people to hold cash in case of emergency. Various agencies now recommend that people keep cash on hand in case digital payments cease working. This includes the Norwegian Directorate for Civil Protection and the Swedish Civil Contingencies Agency, the latter of which circulated a leaflet in the mail in December 2024 urging citizens to keep enough cash for a week of essentials, according to journalist Nick Corbishley in a 3 December 2024 article at nakedcapitalism.com. Similar warnings went out in Finland and Denmark.

The UK Daily Mail after CrowdStrike
failure. Photo: LinkedIn

In the wake of the CrowdStrike failure even the UK press recommended the urgent reinstatement of cash, with the headline, “Global IT meltdown shows peril of going cashless” (see image). And as the New Zealand Herald reported, on the other side of the world the Reserve Bank of New Zealand, the National Emergency Management Agency, and the Citizens Advice Bureau (CAB), advised people to keep cash for just such emergencies. An RBNZ spokesman announced: “The Reserve Bank and National Emergency Management Agency recommend having cash on hand for emergencies—ideally in coins and smaller denominations.” CAB noted that “our law currently provides no protections around cash acceptance”, adding that “To ensure cash remains a viable option … we also need government and businesses that provide essential goods to commit to accepting cash payments.”

The Australian government launched a consultation on “Mandating cash acceptance” after a November 2024 announcement by Treasurer Jim Chalmers on “ensuring the future of cash”. Treasury’s consultation paper suggests a cash acceptance mandate for the sale of essential goods and services that includes corporations and governments, but excludes small businesses with a turnover under $10 million. That category represents 98 per cent of Australian companies, creating conditions under which the cash mandate could in fact undermine cash use, with small businesses let off the hook due to the growing expense of handling cash, with banking requiring time, manpower and significant travel. Additionally, it neglects the reason for that rise in expense—the closure of bank branches which limits access to cash services (p. 4). Most European countries that protect cash use also have exceptions to their rules, but none (that this author has seen) so wide as the Australian government proposes.

Nordic clawback

Fortune June 2024 on rising crime in Sweden. Photo: Screenshot

At the initiative of Swedish central bank, the Riksbank, Sweden amended its laws to ensure “reasonable access” (within 25km) to cash services. This is a huge shift for a
bank that aggressively undermined cash. “Back in 2018, the then-deputy governor of Sweden’s central bank, Cecilia Skingsley, predicted that Sweden would probably be fully cashless by 2025”, reported Corbishley.

Furthermore, the Riksbank’s 2024 Payments Report called on the government to introduce an obligation for merchants to accept cash for essential goods and services and an obligation for banks to accept deposits, adapting their systems to support the digitally excluded and businesses requiring cash access. The report said digitalisation has made payments “more vulnerable to cyber-attacks and disruptions to the electricity grid and data communications”, and called for “public sector intervention” to ensure that payments work under all circumstances, “even in crisis and war”. A government inquiry was due to report in December 2024 but its findings have not yet been posted.

In Finland, which was widely expected to be cashless by 2029-30, the central bank has proposed a legislative initiative to protect cash access, advocating for maintenance of cash infrastructure as a safeguard against payment system interruptions.

The Head of the Payment Systems Department at the Bank of Finland, Päivi Heikkinen, on national television in October 2022 urged people to keep cash on hand in case payments systems were interrupted. A disruption, potentially from a cyber-attack, could last for weeks in the worstcase scenario, she said. According to the Helskinki Times, a 2023 study showed that no less than 95 per cent of Finns see the cash payment option as essential.

The law in Norway states that cash is a “compulsory payment method” and must be accepted, but businesses have increasingly found ways to get around this, so amendments to the legislation have been passed to mandate stricter acceptance of cash with tighter oversight by the banking supervisor. A March 2024 Ministry of Justice and Public Security media statement stressed the importance of cash in the case of “Prolonged power outages, system failures or digital attacks against payment systems and banks”. The amended law came into effect in October 2024.

A November 2023 report of the central bank of Denmark, Danmarks Nationalbank, on the future of cash, weighed in. It concluded that while cash use is in decline it is still “needed” and will be needed “in the future”. Cash has “special characteristics” which explain why one in three Danish citizens hold savings in cash. (It offers immediate certainty of payment; is widely accepted; requires no underlying payment infrastructure or reliance on technology; is anonymous; is tangible and simple; and allows for easier budget control.)

Denmark has had a “cash obligation” since 1984, which generally requires retailers to accept cash. There are exemptions such as remote trade, markets, festivals and self-service checkouts. The central bank report explored widening those exemptions due to the increasing cost of cash and declining usage, but admitted that it is “the banks’ natural focus on costs [which] led to limited access to physical cash services”. Most cash access has been shifted from bank counters to ATMs. The large Danish banks “have no serviced counters” whatsoever, with deposit or collection of cash by appointment only; the counters at many small banks are open for limited hours. More than one in five citizens state that the options for depositing cash at the counter in a bank do not meet their needs.

The central bank states that “stores must be offered reasonable access to cash deposits, as they are obliged to accept cash. Hence, banks must continue to support reasonable access to ensure the efficiency of cash payments for the stores.” It also admits that easing the cash obligation will lead to fewer cash payments and negative impacts on cash infrastructure which will “further limit access to cash”—i.e. it is a self-fulfilling prophecy.

Netherlands warning: bank runs

The Dutch press warns of sabotage of payment systems and energy networks, recommending people hold cash. Photo: Screenshot

The latest country to join the list of nations pushing a return to cash is the Netherlands, the country with the lowest volume of cash payments next to Finland, and lowest personal cash holdings, according to European Central Bank figures. Speaking to a financial newspaper in October 2024, monetary affairs chief of the Dutch National Bank (DNB), Olaf Sleijpen, warned of system outages, cybercrime and even artificial intelligence shuttering multiple banks at the same time: “This could lead to a run, which may lead to DNB having to block financial transactions. Then people can no longer access their money. You don’t want that.” He cited a recent hack of the National Police and stressed that the inability to pay with digital means will become more common, in which case “you have to have cash under the mattress”.

According to EU figures cash payments in the Netherlands and Finland have increased since 2022 by 1 and 8 percentage points respectively. Further, 62 per cent of the euro area population rate a cash payment option as “very” or “fairly important”, another figure which is increasing. But cash is widely considered more than a mere payment option, reported Cash Essentials, it is a safeguard in times of uncertainty and disruption.

Moves to restore or protect cash in other European nations include:

• In May 2022 Spain’s General Law for the Protection of Consumers and Users made it mandatory for retailers to accept cash. Refusal to take payment in cash is a violation of the law.
• In August 2023 legislation passed the UK Parliament to ensure that banks provide reasonable access to cash, to be policed under the regulatory framework. In Ireland legislation has been drafted to set geographical requirements for cash access.
• In August 2023 the Chancellor of Austria proposed a three-point plan to protect cash use, instructing the central bank and finance ministry to develop legislation. This would include “constitutional protection of cash as a means of payment”; ensuring that businesses and other outlets accept cash; and central bank maintenance of an accessible supply of cash.
• In June 2023 the European Commission (EC) put forward a proposal to protect cash usage throughout the Eurozone. If adopted, EU member states would need to “ensure widespread acceptance of cash payments, as well as sufficient and effective access to cash”. It does however recognise conditions under which nations could decide, in certain circumstances, to exclude cash payment as an option.
• In France it is a criminal offence to refuse a cash transaction, although there are exceptions, similar to other countries, and in some cases upper limits.

The vulnerabilities in Europe were created by governments giving banks free rein, which saw them quickly seize the opportunity to put their profits ahead of public need. The same fervour to reverse the problems created by the banks’ zealous cashless drive has exploded across Australia. Our leaders should take Europe’s word for it and heavily regulate the banks without further ado.

Australian Alert Service, 5 February 2025