Although the concept of central bank digital currency remains severely contested, efforts are being made to turn this into a very real thing. Sweden could be one of the first countries to go ahead with such an initiative. Some more information has been leaked regarding the creation of an E-Krona, which is scheduled to be brought into circulation as early as next year. The Swedish central bank has big plans for this currency, by the looks of things.
E-Krona can Become a Very Real Thing Soon
The concept of a central bank digital currency is of great interest to the Swedish government. The nation is currently seeing far less cash use than before. This seems to indicate both retailers and consumers are looking for new payment opportunities in general. This creates new opportunities for the country’s central bank as well, which will gladly explore the option of the E-Krona.
The bank is currently looking at whether or not it is feasible to create a digital currency in the first place. It would not replace the regular currency by any means but merely complement it. After all, there is no reason to abolish cash in Sweden just yet, even though fewer people are interested in using it. However, it has to make sense to the bank and the government to even create an E-Krona in the first place, as there are always risks to take into account.
With the use of cash in Sweden decreasing rapidly, coming up with digital solutions is more important now than ever before. The E-Krona would provide the public with state-guaranteed digital cash. Payment service providers could also make use of the new currency without any major repercussions. For the time being, the concept is merely being explored, which does not necessarily mean it will become a real entity in the future.
The E-Krona will be issued on some sort of centralized ledger controlled by the Swedish central bank. It is unclear if this will be a blockchain, distributed ledger, or just a regular old database. There is also no indication as to how many of these digital kronor will be brought into circulation. After all, inflating the available amount of currency in any form will have some big consequences. It does appear there will be a dedicated app for this currency as well, although no specifics have been revealed at this time.
For the time being, the bank’s primary objective is to investigate the feasibility of such an E-Krona. Even though it makes a lot of sense on paper, thorough research is needed to ensure all bases are covered. There has been a strong focus on investigating which technologies will be best suited for this digital venture. To that end, the group will have an open dialogue with the authorities and private service providers alike.
Sweden’s central bank is not the only institution showing an interest in digital currency, though. Over the past few months, we have seen other financial entities launch similar research efforts. For the time being, none of those efforts have made any significant impacts whatsoever, which should not come as a big surprise to anyone. Central bank digital currencies will always remain an interesting train of thought.