No Cash on Sweden: Central Bank Pilot Testing e-Krona
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Oct. 29, 2018
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After a few years of research, Swedish central bank, Sveriges Riksbank (Riksbank) came to the conclusion that cash usage in the country is becoming a rare habit. It plans to adapt to the changing times by working on a pilot project to create its own national cryptocurrency, e-Krona. Thus, the regulator intends to provide the digital assets, aiming at the cashless payment system to be developed in the country’s near future.

According to representatives of Riksbank, the project is striving to develop and further integrate a proven and ready-to-use e-Krona. The regulator intends to create a tool with the ability to track transactions without additional fees for settlement operations.

As part of the pilot project scheduled for 2019, developers will also try to create a solution that will allow its citizens to pay with e-Krona using a card or a mobile application. In addition, before launching the digital currency, the bank intends to settle all regulatory and legal obligations.

According to the Riksbank payment unit’s lawyer and advisor, Monika Johansson, the regulator is already cooperating with banks in introducing digital currencies into circulation. However, for electronic payment instruments to be used by residents of the country, the approval of the legislators is necessary, she noted.

Also, representatives of Riksbank noted that within a few years, Sweden may come to a complete rejection of cash retail payments, which will be facilitated by the approval of the initiative of the regulator.

Niklas Arvidsson, a researcher at KTH Royal Institute of Technology in Stockholm, predicted that Sweden would become the first country in the world to refuse cash.

“Cash is still an important means of payment in many countries’ markets, but that no longer applies here in Sweden,” he said.

Sweden Might Become Cashless with the Help of Bitcoin

Last year’s statistics showed that 900 of Sweden’s 1,600 banks’ branches no longer store cash and accept cash deposits, which led Riksbank to consider a CBDC option.

The government-backed e-Krona is inline with the Sveriges Riksbank Act, however, the bank cannot offer accounts to the public. To be able to manage the account-based e-Krona, the legislator should agree to amend the act after reviewing Riksbank’s proposal, which will be based on their investigation.

Meanwhile, other Swedish authorities are contemplating the benefits and risks of the blockchain, the technology behind cryptocurrencies.

According to mlexmarketinsight, Swedish Competition Authority is looking at the issue from another angle. Their report “Blockchain Technology from a Competition Perspective" will be published in April 2019.

While the Swedish Competition Authority is still working on the report, country’s another legislator, Sweden’s Land Registration Authority has tested the technology for the security process in real estate transaction and transfers of mortgage deeds. For this, the body attracted the blockchain company Chromaway.

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