Sweden is considering a possible transition to the CBDC „e-krona

Sweden is examining the risks and consequences of moving its economy to its digital currency „e-krona“.

The Swedish government is moving forward with its central bank’s digital currency, or CBDC: it is launching a formal review of a possible transition to digital currency.

According to a Bloomberg report of 11 December, the review will explore the feasibility of moving the country’s payment infrastructure to a digital currency. The country has one of the most cashless economies in the world.

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Per Bolund, Sweden’s financial markets minister, said the government expects to complete the digital currency review by the end of November 2022. Anna Kinberg Batra, former chairman of the Riksbank’s finance committee at the Swedish central bank, would lead the initiative.

Bolund stressed that it is crucial to ensure that the country’s digital payment system works safely, and that it is „available to all“. He said:

„Depending on how a digital currency is designed and the technologies used, it can have major consequences for the entire financial system“.

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Sweden has emerged as one of the leading pioneers of CBDC technology, announcing a pilot platform for a digital currency known as e-krona by the end of 2019. To build the platform, the Swedish central bank partnered with Irish professional services company Accenture. Riksbank launched its first e-krona pilots in February 2020, stating that the tests would run until February 2021.

In October 2020, Riksbank Governor Stefan expressed his confidence that the central bank would issue an e-krona and recognise it as legal tender. Last year, Stefan said that the Swedish central bank cannot be the only institution to decide on the future of the implementation of an e-krona:

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„In view of the economic importance of the issue, the Riksbank cannot decide on its own whether and, if so, in what form an e-krona should be introduced. It is a decision that must be supported by substantial political support.