The development of financial technology has always been an important driving force behind changes in the financial sector and it has often entailed new challenges for financial stability. Now and then, it has also given central banks reason to consider how they can best do their job. During the latter part of the 20th century and the beginning of this one, we have seen several innovations that have changed consumers’ methods of payment. 11 In recent years, the amount of payments made with the aid of smartphones and mobile bank ID has risen very rapidly. The Riksbank has actually contributed to the latter by giving Bankgirot access to a special account in the Riksbank's payment system RIX that enables secure payments with a mobile application. 12  Use of cash declining rapidly in Sweden All of this has contributed to the volume of outstanding cash in Sweden declining from around 10 per cent of GDP at the beginning of the 1950s to around 1.5 per cent of GDP today. The largest decline in the use of cash has taken place in recent 11 Some examples of innovations that have changed our way of making payments over the years include cheques, ATMs, credit and debit cards and bank transfers – initially as paper forms and later as direct transfers over the Internet. 12 Today 97 per cent of all citizens in Sweden have access to some form of payment card. 85 per cent have access to on-line banking and 80 per cent have access to direct debiting.

This is not only my opinion and the opinion of the Riksbank, it is also shared by the International Monetary Fund. In its Article IV review of Sweden's economy in 2016, the IMF concluded that the foreign currency reserve should not be smaller than it is now. The European Central Bank, ECB, has also recently issued an opinion recommending that Sweden should not reduce the size of its foreign currency reserve below the current level. 10  The foreign currency reserve should be paid for by the banks The cost – or insurance premium – of having a liquidity insurance in the form of a foreign currency reserve is at present charged to the Riksbank’s earnings and central government finances and is calculated at around SEK 400-500 million a year. This is, of course, a lot of money, but calculated per inhabitant per year the insurance premium is only SEK 40-50. This corresponds to around two cups of coffee or half of a cinema ticket. Moreover, it is actually a cost that could well be transferred to the banks, which are the primary beneficiaries of such an insurance. One could say – to take it to an extreme – that tax-payers currently subsidise the banks by almost half a billion a 9 The Government’s draft referral to the Council on Legislation (in Swedish):  http://www.regeringen.se/494cc9/contentassets/c34c52bc62904b2984784e2b94f1e6aa/riksbankensfinansiella-oberoende-och-balansrakning-utkast-till-lagradsremiss The Riksbank’s consultation response: http://www.riksbank.se/en/Press-and-published/PressReleases/2017/Important-to-have-sufficient-foreign-currency-reserve-rapidly-available-in-a-crisis/ Other public authorities’ consultation responses regarding the foreign currency reserve can be found here (in Swedish): http://www.fi.se/sv/publicerat/remissvar/2017/remissvar-pa-utkast-till-lagradsremiss-riksbankensfinansiella-oberoende-och-balansrakning/ and https://www.riksgalden.se/globalassets/dokument_sve/om_riksgalden/remissvar/2017/riksbankens-finansiellaoberoende-och-balansraekning-remissvar.pdf 10 ECB (2017).