Sweden’s central bank pushes ahead with plans for government digital currency

The Riksbank, Sweden’s central bank, has issued a second report on the E-Krona, a digital currency of the central bank (CBDC). It states that the use of cash has continued to decline sharply in Sweden. In order to adapt to the changing financial landscape and maintain its competitiveness vis-à-vis the private payment market, the e-Krona is to become a modern electronic crown to complement physical money.

A survey by the Riksbank shows that only 13 per cent of the Swedish population pay their expenses in cash. In 2010, the figure was 39 percent, which represents a decline of 25 percent. Several banks in Sweden are already no longer trading cash. Nevertheless, there are some groups of people who are sceptical about the development of e-Krona, as they find it difficult to adapt to new technologies. This has put pressure on the Riksbank to press ahead with the development of E-Krona but does not seem to have slowed it down.

The e-Krona should initially be used in addition to cash. The Bank considers that, without faster development efforts, private companies may carry too much responsibility for payments, which could lead to problems. In particular, the Swedish Central Bank wishes to avoid private institutions assuming full responsibility for ensuring that payments function in crisis situations. In the report it says (freely translated):

Cash consumption continues to decline in Sweden. In the future, cash may be so marginalised that it becomes difficult to use it as a means of payment. The Riksbank has been making money available to the public for 350 years, but the technical development and digitisation of payments will further advance the question of the role of the state. If the marginalisation of cash continues, a digital crown, an e-crown, could ensure that the general public continues to have access to a strategically guaranteed means of payment. Otherwise the public will ultimately become totally dependent on private payment solutions, which may make it more difficult for the Riksbank to promote a secure and efficient payment system if it does not react to current developments and leaves the payment market entirely to private actors.

If the state does not offer payment services through the central bank as an alternative to the highly concentrated private payment market, this can lead to a decline in competitiveness and a less stable payment system and make payment more difficult for certain groups. Ultimately, it may also lead to a loss of confidence in the Swedish monetary system. Some of these problems could be neutralized or alleviated by an E-Krona.


Central bank digital currencies (CBDCs) remain a relatively new and unexplored area that is currently being analysed by several central banks around the world, the report says. It will therefore take some time for Sweden to decide whether to introduce an E-Krona. In particular, in addition to the technical implementation, legal questions also need to be clarified:

The analysis must be continued so that we can expand our knowledge about the consequences and effects of e-Krona. At the same time, technical solutions must be developed so that an E-Krona can be developed and tested.

The report suggests that the Riksbank starts designing a technical solution for an E-Krona to test which solutions are practical and feasible. The e-Krona is to become a modern electronic crown in addition to physical money.

E-Krona can be referred to as the Swedish krona, which can either be kept in an account with the Riksbank (account-based) or stored locally, e.g. on a card or in a mobile app (value-oriented). Both types of e-krona assume that there is a register, so that it is possible to record transactions and secure who is the rightful owner of the digital crown.

This means that digital transactions are traceable with e-krona. The Bank proposes that a pilot programme with full implementation by 2021 be implemented in 2019.

IOTA and Stellar Lumens still in race

As we already reported in Apirl, around 40 projects applied to technically implement the project, 19 of which made it into the second round. These include the two well-known crypto currencies IOTA and Stellar Lumens, which were still in the race in April. Since then, however, there has been no official statement as to whether further projects have already been sorted out or whether a project has already been awarded the contract.

IOTA is excited to explore the potential role of IOTA in their national e-Currency/e-Crown initiative as one of the candidate solutions.https://t.co/yzrRBG8Ung#IOTA

– IOTA (@iotatoken) January 19, 2018