Sweden’s government has launched a review into the feasibility of its long-debated e-kronor. The nation was among the first to start work on its own central bank-issued digital currency (CBDC).
Sweden already has a pilot scheme for its digital currency. However, whether it ever goes live and its specific implementation are still open questions.
Sweden moves slowly toward its own digital currency
Sweden first announced its e-kronor ambitions in March 2017. One of the world’s most cashless societies already, the nation was one of the first to contemplate issuing a digital currency.
In a new move, the Swedish government announced on Dec. 11 the launch of a review into the feasibility of the ongoing project. Bloomberg reports that Anna Kinberg Batra, a former chair of the Riksbank’s finance committee, is leading the review process. It is due to conclude by late-November 2022.
The country is already running a pilot of the e-kronor with Accenture Plc. The pilot has been exploring how the public would take to a CBDC since February 2020. It’s due to conclude in February 2021.
Swedish lawmakers are still to make the ultimate decision on whether to launch the e-kronor or not. In October this year, Riksbank governor Stefan Ingves said the decision needs to be a political one.
Sweden’s digital currency to be nothing like bitcoin
Per Bolund, the nation’s financial markets minister, said the ongoing reviews will influence whether Sweden pushes on with its digital currency ambitions. They will also affect the implementation itself. He added that the design and technologies used ‘can have large consequences for the entire financial system’.
In an earlier document detailing the pilot, the Riksbank noted problems with the continued sidelining of cash in society. Therefore, any forthcoming e-kronor should complement cash.
While precise details of the e-kronor are still unknown, the pilot document noted a few likely features. They included sending and receiving payments by a mobile-hosted digital wallet, 24/7/365 availability, payments via wearables (smart watches and cards), and potentially offline use, too.
The Riksbank stated that using the digital currency should be as easy as sending a text.
The document is careful to note differences between public blockchain-based digital currencies, like bitcoin, and its CBDC. While the e-kronor will be based on a blockchain of sorts, nodes will be permissioned by the Riksbank itself.
CBDC race heating up
While Sweden was one of the first nations to consider a CBDC, it was beaten to launch by the Bahamas. As BeInCrypto reported earlier this year, the island nation recently launched the Sand dollar to help facilitate transfers across the archipelago.
European Central Bank President Christine Lagarde recently pressed the need for a digital euro. She reasoned that such a project would help preserve the EU’s monetary sovereignty in the face of both international and private competition.
Meanwhile, China appears to be the most advanced in terms of its CBDC development. The nation has been running major pilots for months now, with thousands of members of the public already having had the opportunity to test the digital yuan in real-world locations.