Several countries have alluded to the possibility of issuing their Central Bank Digital Currency with Sweden becoming the latest to join the race. According to reports, the Swedish government is going forward with its CBDC following the launch of a formal review of risks and consequences of a possible transition into the e-Krona CBDC.
Sweden to study the risks and consequences of CBDC
The Swedish government is launching a review exploring the possibility of transitioning into a CBDC according to Bloomberg. Sweden is looking to transition into e-Krona CBDC despite the country having the most cashless payment system globally. Per Bolund, the country’s financial markets minister said that they expect to complete the CBDC review by November 2022. Former Swedish central bank, Riksbank’s financial committee chairperson, Anna Kinberg Batra will lead the review initiative.
Bolund said that it is vital to ensure that the country’s digital payment system is working safely and is accessible to everyone. The minister added that digital currencies can have huge implications on the financial system depending on how they are designed and the tech they use.
Regulators supporting the idea of e-Krona
Currently, Sweden is among the leading countries in terms of pioneering CBDC tech after regulators announced a pilot platform for a CBDC called e-Krona in late last year. The country’s central bank partners with Accenture to create the platform. In February this year, the central bank launched the forts e-krona stating that the pilot could continue until February 2021.
In October Stefan Ingves, the central bank’s Governor said that there is a need to issue an e-krona which will be a legal tender. Ingves said that the e-Krona will be 27/4 payments anywhere, be a cross border currency that will be issued directly from Riksbank. The digital currency will have a digital ID to ensure it is compliant with AML policies. He however indicated that the central bank cannot be the only institution deciding on the implementation of the e-Krona because this is an economically important issue. Ingves said that the decision needs massive political goodwill.