Sweden Looking Into Potential Transition to CBDC
- The review of the potential transition to a digital currency is expected to last until November 2022.
- A recent report by the country’s central bank has shown that Swedish citizens have continued moving away from cash.
The building of the Swedish Parliament (Riksdag) and the Riksbank Bridge over the Lilla Vartan Strait with the national flag of Sweden in the foreground. Shutterstock
Sweden has taken another step towards releasing a Central Bank Digital Currency (CBDC) with the launch of a formal review into the potential of transitioning to the e-krona, Bloomberg reported on 11 December.
According to the publication, the finance committee of Riksbank, the country’s central bank, launched the review to explore the practicality of moving the country’s payments infrastructure to a digital currency. Lead by the former Chairwoman of Riksbank’s finance committee, Anna Kinderg Batra, the initiative is expected to complete by the end of November 2022. Sweden’s Financial Markets Minister, Per Bolund, commented on the importance of the initiative:
“It’s crucial that the digitalized payments market functions safely, and that it’s available to everybody. Depending on how a digital currency is designed and which technologies are used, it can have large [sic] consequences for the entire financial system.”
The review was most likely spurred by Riksbank’s latest report, titled “Payments in Sweden 2020”, which claimed that the usage of cash in the country has fallen to its lowest level, with only one-tenth of all payments being made using cash. The country’s population has been moving away from cash for years now, as shown by a 2018 report by Riksbank, which claimed that card payments in the country had increased by 25 percent at the time.
Sweden has been on the forefront of CBDC research for years now. Back in 2019, the country’s central bank partnered with professional services company Accenture to develop a platform for the e-krona digital currency. At the start of 2020, Riksbank joined a working group with 5 other central banks, with the goal of researching the potential use cases for CBDCs.
Tests of its e-krona also began in February 2020, with the Swedish central bank running its pilot scheme in an “isolated test environment” to determine if the performance of the digital currency was sufficient and reliable. The pilot is scheduled to end in February 2021.
- The head of China’s central bank digital currency institute said the e-CNY has undergone a major upgrade, and should be made available as an option in all retail scenarios.
- The PBOC official noted that platforms can integrate the CBDC in the short term using QR codes, and focus on upgrading their payment tools in the long run.
Office building of the People’s Bank of China. Flickr
- The current governor of Florida, Ron DeSantis, announced he is joining the race for the 47th president of the U.S. during a Twitter Spaces event on Wednesday.
- During his speech DeSantis declared his support for Bitcoin and the wider crypto space, noting that if Joe Biden is re-elected “they’ll probably end up killing it”.
- Planned for 1 April, the CBDC trial will involve real consumers and real transactions, though they will be limited to a certain number of customers and transfers.
- The pilot, however, will not be opened to the general public in its first phase, and will only be opened to customers chosen by the 13 participating local banks.