Sweden’s Central Bank Favors Digital Currency

As the Riksbank seeks to adapt to a society that is turning to cashless payment methods, the Swedish central bank is considering issuing a digital currency. While the bank explained a concept of an “e-krona” in a report last year, it said on Friday (Oct. 26) that the currency should be designed to enable testing in the future, Fortune reported.

“If the marginalisation of cash continues a digital krona, an e-krona, could ensure that the general public still has access to a state-guaranteed means of payment,” the Riksbank said. “Alternatively, not to act in the face of current developments and completely leave the payment market to private agents, will ultimately leave the general public entirely dependent on private payment solutions.”

An experiment would include a “value-based e-krona,” which would enable traceable transactions. It would be stored in a mobile app or on a card. At the same time, the Riksbank called for proposals to legislative changes that could pave the way to providing legal standing to the e-krona.

The news comes as Swedish lawmakers are trying to slow down the nation’s move toward going entirely cashless by forcing the country’s largest banks to offer cash withdrawals and handle daily receipts. According to Bloomberg in June, Parliament’s Riksbank committee was in the process of reviewing the law, which would apply to banks that offer checking accounts and have more than 70 billion kronor ($8 billion) in deposits from the public.

At the time, the lawmakers added that there must be “reasonable access to those services in all of Sweden,” and that 99 percent of Swedes should have a maximum distance of 25 kilometers (16 miles) to the nearest cash withdrawal. Sweden has fast become one of the most cashless societies in the world, which is seen as a potential problem for citizens without access to mobile phones or bank cards. In addition, there is worry about what would happen if the digital payments systems suddenly crashed.