Cash survives, in new updated style

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Serious, official efforts to turn Norway into a cashless society have been put on ice, just in time for the country’s central bank to roll out its much-hyped new currency in updated syle. Norges Bank has been making it clear that Norwegian currency will remain legal tender, despite tax authorities’ and some politicians’ efforts to do away with it.

Norway’s 200-kroner bank notes are among those most used. This new version was making its debut on Tuesday, featuring one of the country’s biggest food sources and exports, the codfish. PHOTO: Norges Bank

The central bank was ready to debut the 100- and 200-kroner versions of its new series of bank notes on Tuesday afternoon. The series highlights Norway’s important maritime history and industry, with the Gokstad Viking ship adorning the NOK 100 notes and codfish featured on the NOK 200 notes. A lighthouse and a search and rescue vessel will adorn the new 50- and 500-kroner notes set to debut at the end of next year, while a wave will spill over the new NOK 1,000 currency that will be the last to roll out in the fall of 2019.

Norway’s existing 100- and 200-kroner notes will still be accepted for the next year but will gradually be collected and phased out by May 30, 2018. They can continue to be traded in at Norges Bank, though, for another 10 years.

The new cash is not only meant to reflect Norway’s maritime culture and business but also to improve security and prevent counterfeiting. The roll-out also defies efforts to discourage Norwegians from using cash and all but force them over to electronic banking. Commercial banks have been closing branches and even removing all cash from those left. Automated teller machines (called minibanks in Norway) have become harder to find and some retailers, restaurants, cafés, doctors’ offices and hospitals have also tried to do away with cash, forcing customers to use debit or credit cards or new mobile pay solutions.

Norway’s new 100-kroner bills feature the Gokstad Viking ship, with the entire series of new currency based on a maritime theme. PHOTO: Norges Bank

Tax authorities welcome any moves towards a cashless society, so that they can more easily track transactions, battle the black market in a variety of sectors (not least household services) and make Norway’s economy as transparent as possible. The Conservative Party, which leads the country’s current minority government coalition, went so far earlier this year to propose an official examination of a transition to a cashless society. The Conservatives wanted to make it legal for merchants and other businesses to refuse to accept cash, claiming that could secure and simplify transactions and hinder robbery.

The banking and finance industry quickly embraced the Conservatives’ proposal, agreeing that phasing out cash would make transactions more efficient, secure and, most importantly, cheaper. The banking industry has been pleased that Norwegians already are keen to use their plastic cards, even for small amounts, since it wants to eliminate the sheer expense of handling cash.

Opposition mobilized, however, with the authorities at the state agency Datatilsynet, which works to ensure privacy in Norway, worrying that forcing use of electronic banking and transactions will create and leave records of everything Norwegians buy. Some still prefer to use cash at the grocery store, pharmacy and Vinmonopolet, for example, to avoid leaving any electronic footprints or information for marketing experts. Even young Norwegians who are more tech-savvy than most raised objections, with 18-year-old Thorvald Dommerud co-authoring an appeal in newspaper Aftenposten last winter that “free citizens in a free society must have the right to shop anonymously.”

Norway’s “old money” will still be around, with the current 100- and 200-kroner notes accepted until May 30, 2018. They can also be traded in at the central bank for 10 years beyond that. The new 50- and 500-kroner notes debut late next year, and the new 1,000-kroner in the fall of 2019. PHOTO: Norges Bank

Concerns were also raised over the difficulty or inability of elderly citizens to adapt to electronic banking, when many still don’t use computers or smart phones. “Some also have problems remembering pin codes,” Dommerud wrote, or even seeing figures on small screens and understanding how mobile technology functions. A cashless society can lead to more digital discrimination, it was argued, while children growing up in a cashless society may also fail to learn the value of money if there’s literally none around to count and hold in their hands.

The danger of cyber attacks and breakdowns in electronic banking, which have plagued many Norwegian banks and especially the country’s largest, DNB, remain perhaps the biggest concern and hindrance to a fully cashless society.

After months of debate, a majority in Parliament emerged this spring against removing current requirements that demand acceptance of cash. Both the Conservative and Labour parties agreed to secure the right to use cash. The Center Party never wanted to do away with it, so that blocks Norway’s move to a cashless society, as least for now. It also means that cash will survive beyond the upcoming parliamentary election in September, no matter who wins and forms a government.

That helped clear the way for this week’s debut of new bank notes, which Norges Bank officials were celebrating on Tuesday in the scenic fishing hub and cod capital of Svolvær in Lofoten, on Norway’s northern coast. The central bank also prevailed in printing new versions of Norway’s largest bank notes, the 500- and 1,000-kroner bills that tax authorities would prefer be dumped. Berglund

  • inquisitor

    Going cashless and depending only on the internet is a mistake.

    • richard albert

      Absolutely. But it is a bit like saying that jumping off of a cliff is a mistake. It sure is, but that doesn’t convey that half of it. They would need to copy Germany where ‘die gute alte D-mark’ is still to this day legal tender and people still shop with it. (Current rate is 1 Euro = 1.92 DM.) De-monetize it and you will see the trade in Euros, GBP, and USD go way up. There would be cash-hoarding on a significant scale. Norwegians already do that. If it remains legal tender, there would be NOK hoarding; otherwise other currencies. Both are inflationary. It is very difficult to force people to open their bank accounts to electronic transfers. In the US, Wells Fargo has offered everything from free bill-paying service to automatic transfers to get people to open accounts or update existing ones. Chase Bank is issuing no-fee debit cards that even cover other bank’s ATM fees. But the percentage of the population over 40 that uses these services is still fairly low, although banks are reluctant to quote hard numbers. One of the drivers is grave concern over cyber-security and that is 100% legit. The ‘too big to fail’ argument is dead. That applies to individual financial institutions, the internet, and entire economies. Remember Iceland? And, if there is a major disruption, the criminal element among cash-hoarders and currency traders will just have a frabjous day. Think of one, huge pawnshop…
      (I think the chaos caused by ATM-minders on strike in Norway is just an amuse-bouche.)

      • inquisitor

        Excellent points. Thanks for the lengthy response. The risks are so numerous and serious that it boggles the mind that anyone would want to rely upon only electronic means. There is something almost sacred, and surely secure, in having a physical, tangible currency in your possession.