Sweden’s central bank, the Riksbank, has been widely reported as preparing the idea of using a centrally issued digital currency, e-Krona, for a while – but now it has firm plans to launch a new cryptocurrency.
The Riksbank started an e-Krona project in the spring of 2017 to examine the scope for the creation of a central bank digital currency (CBDC), With cash usage on the decline in Sweden, the central bank says an electronic currency could ensure that the general public will still have access to a state-guaranteed means of payment.
“Adopting a position on whether Sweden should introduce an e-Krona will take time,” states the Bank. “But at the same time, the analysis work needs to continue to increase the Riksbank’s knowledge of the consequences of an e-Krona and technological solutions need to be developed and tested.”
The aim will be “to develop a tested and ready e‐Krona” that could be introduced should the bank “wish to do so,” it said in a second report of its electronic currency review. “The initial focus will be on an e‐krona that constitutes a prepaid value (electronic money) without interest and with traceable transactions.”
The pilot project that could start next year will investigate how to create an e-Krona that can be loaded on to an app or a card to be used for payments. The bank will also examine what legal changes would be needed to eventually introduce an e-Krona that is also connected to an account at the central bank.
Sweden is becoming increasingly cashless. Credit and debit cards are now by far the most common mode of payment while mobile payments have become as common as cash. A parliament committee has proposed that the largest banks should be forced to handle cash in an effort to halt the development. This year, only 13 percent of Swedes paid for their most recent purchase in cash, down from 39 percent in 2010.
Sweden may “in a few years’ time be in a position where cash is no longer generally accepted by households and retailers,” according to the report.
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