Norwegian Finance Minister Jens Stoltenberg has asked Norway’s central bank to withdraw its currency with the highest denomination from circulation. The move comes even though the government has urged Norwegians to have cash on hand, in the event of sabotage or cyber attacks on the country’s highly automated payment systems.

Finance Minister Jens Stoltenberg worries that Norway’s biggest bank note, worth NOK 1,000 (USD 100), can be misused and contribute to economic crime. PHOTO: Finansdepartementet/Ida Laingen

It’s a paradox of sorts: While the justice ministry wants Norwegians to have enough cash on hand to pay for at least a week’s worth of groceries (as part of national preparedness if payment systems crash in a national emergency), the finance ministry wants to end the use of NOK 1,000 notes (currently worth around USD 100) and lower the ceiling on cash payments to NOK 10,000.

“It’s important for this government to fight economic crime,” said Stoltenberg after formally asking the central bank (Norges Bank) to withdraw the thousand-kroner notes. That would leave Norwegians with cash in denominations of NOK 500, 200, 100 and 50, plus coins.

His ministry noted that use of cash in Norway has steadily fallen for many years, and was halted almost entirely during the pandemic because of infection fears. Now, according to the ministry, only 2 percent of all payments made in Norway involve cash.

It’s been less than 10 years since Norges Bank introduced the current series of Norwegian currency, all based on a maritime theme. Now the  1,000-kroner notes that feature stormy seas may be washed away for good. PHOTO: Norges Bank

The government, however, recently demanded that all retail businesses still must accept cash as a payment means, overruling merchants concerned about risk of robbery and the added expense of handling cash. Some Norwegians still prefer to use cash for privacy and personal accounting purposes, and warn against over-reliance on technology and automation.

That’s also why the justice department wants to keep cash available and in circulation. It’s become more costly for consumers, though, too, after the banks and couriers stocking automated teller machines (ATMs known as “minibanks” in Norway) suddenly quadrupled withdrawal fees in December. It used to be free to take out cash from ATMs, especially after traditional bank branches began to disappear, but the most ATMs started charging NOK 10 (USD 1) per transaction. Just before Christmas that jumped to NOK 40 with no warning at many machines in Oslo, in turn prompting some users to take out more cash, since it cost NOK 40 whether a bank customer withdrew NOK 1,000 or NOK 3,000.

Norwegian authorities have long fretted that use of cash also often involves tax evasion, especially the country’s 25 percent VAT that functions like a sales tax. There’s long been a 20,000-kroner limit on transactions in retail establishments, and Stoltenberg now wants to drop that to NOK 10,000. Most merchants themselves far prefer debit- or credit card use for security reasons and because of the cost of having cash on hand to make change.

Norway’s police economic crime unit Økokrim has long warned that since cash is anonymous and can’t be traced, it’s popular among criminals. “It will help us fight economic crime if we make it more difficult for criminals to pay cash and white-wash their transactions,” Stoltenberg wrote on social media this week. “Denmark removed its 1,000-krone notes last year, and Økokrim has clearly recommended we do the same.”

Norges Bank officials have acknowledged “major changes” within cash use and are therefore already underway with a new evaluation. They have said they will answer the finance ministry’s letter when their evaluation is finished.

NewsinEnglish.no/Nina Berglund