While most people aren’t familiar with the currencies of less prominent nations, many European countries share the advantage of a common currency.
However, not all countries within Europe use the Euro. For instance, travelers in Sweden need to change their Euros into Swedish currency to make local transactions.
Sweden uses the Swedish Krona currency. A Krona, which means crown in Swedish, consists of 100 öre and is represented by the symbol KR. Its currency code is SEK. The plural of Krona is Kronor.
This article will outline a brief history of the Krona and go over some interesting facts about transacting in Sweden. It will also explain why Sweden can be an expensive place to live in and compare it to its Scandinavian neighbors.
Also, see What Is Sweden Gate? to learn more.
The Swedish Krona
Sweden has used the Krona as its official currency ever since it replaced the Swedish Riksdaler in the Scandinavian Monetary Union of 1873. [1]
The Monetary Union was an agreement between Sweden, Denmark, and, later, Norway to keep their currencies fixed to the gold standard.
The Scandinavian Monetary Union only lasted until 1914. And since the 1990s, the Krona has also been allowed to “float.”
That is, its exchange rate fluctuates according to the demand for Krona in international currency markets.
In 1995, Sweden signed the European Union Treaty, but it has yet to adopt the Euro and has no immediate plans to do so. [2]
At present, all cash transactions in Sweden are conducted in Kronor. Incidentally, both Denmark and Norway continue to use their own currencies too.
The success and stability of the Swedish economy and the Swedish Riksbank’s responsible monetary policies over the years have meant that the Krona is today considered a safe haven currency.
It offers lower returns to buyers but greater protection in volatile markets.
Information on Using Cash in Sweden
Swedish Kronor are available in banknotes of:
- 20
- 50
- 100
- 200
- 500
- 1,000
However, there are also Kronor coins, which are available in 1, 2, 5, 10.
There are no coins or notes of a denomination under 1 Krona, so all cash transactions are rounded off to the nearest whole number.
However, digital transfers are accurate to the öre (more on this later).
Older versions of the 25, 50, and 1,000 Kronor banknotes are now no longer valid.
But, regardless of how old they are, outdated notes can be exchanged at the Riksbank for a fee of SEK 200. [3]
While there is no limit to the amount of money a visitor can carry into the country, they can only make payments in Kronor.
Those carrying other currencies will need to exchange them at a currency exchange or withdraw Swedish Kronor at an ATM to make purchases in cash.
Why Is Cashless the Best Way To Pay in Sweden?
Visitors to Sweden may find that paying using debit or credit cards, bank transactions, or payment apps may be the best way to transact locally when in Sweden.
The country is one of the leading cashless economies in the world.
By 2018, only 1% of the Swedish annual GDP was transacted in cash. [4] Today, many establishments will not accept cash at all.
Many Swedish citizens make their everyday payments using an app called Swish that transfers money to vendors directly from their bank accounts.
The practice has become so much a part of everyday life that the Swedes have a verb for paying digitally – Swisha, i.e., to swish.
A few adventurous Swedes have gone a step further and had microchips implanted into their hands so that they can make payments using hand gestures. The chips can store various other information as well.
Someone with an implant can avoid carrying an assortment of cards, keys, and documents.
The Swedish Riksbank is also experimenting with one of the world’s first central bank digital currencies, the e-Krona.
The Story Behind Sweden’s Fintech Acceptance
A spate of cash robberies in the late 2000s set Sweden off on the path of accelerated acceptance of digital payments.
The most spectacular of these, the Västberga helicopter robbery, is now being made into a Netflix film starring Jake Gyllenhall. [5]
The Västberga robbery was a high-octane armed heist, readymade for the silver screen.
The robbers descended on the roof of the office of British security firm G4S armed with Kalashnikov rifles.
Although seven men were later arrested, the £ 5.5 million they made off with was never recovered.
In the wake of the robberies, managers at the Riksbank also considered other factors that persuaded them to move away from cash.
Cash transactions mean more costs for businesses. Notes have to be counted, stored, and transported, all of which cost money.
Further, premises with cash are more expensive to insure and more likely to be robbed.
Why Is Sweden So Expensive?
Swedish Visas require travelers to carry SEK 450 for each day they spend in the country.
Depending on their plans, visitors may wish to access even more funds, as Sweden, like many other Scandinavian nations, is a relatively expensive destination.
Hospitality services and many other expenses tend to be higher in Sweden than in many other parts of the world.
One of the main reasons Sweden is so expensive is the high wages Swedish businesses pay their employees.
In many industries, wages are even set through collective bargaining. [6]
Another reason goods and services cost more in Sweden is the high level of indirect taxation.
Many people think income taxes in Scandinavian countries are excessively high, but fewer are aware that countries like Sweden also charge a Value Added Tax (VAT) of 25%. [7]
This means every purchase costs a little more than elsewhere.
On the flip side, higher wages and taxes directly benefit Swedish citizens, who enjoy some of the highest standards of living in the world.
Swedes are among the wealthiest people in the world, [8] and they enjoy excellent government services, health care, and education.
Sweden’s high prices are also in line with its Scandinavian neighbors. If anything, Norway, Denmark, and even Finland are more expensive than Sweden. [9]