Sweden has reportedly begun piloting an electronic version of its national currency, the krona. The European nation’s government says that the e-krona is a step closer to its official launch as a central bank digital currency (CBDC). The testing of the country’s CBDC will go on for one year, and is scheduled to end in February of next year.
As noted on Riksbank’s (Sweden’s reserve bank) website,
“The use of banknotes and coins is declining in society. At the same time, technological advances with regard to electronic money and payment methods are proceeding rapidly. The Riksbank sees potential problems with the marginalisation of cash and has therefore initiated a pilot project to develop a proposal for a technical solution for Swedish kronor in electronic form, an e-krona. No decisions have yet been taken on issuing an e-krona.”
If and when the e-krona is officially launched for use by Sweden’s residents, the main idea will be that this blockchain or distributed ledger technology (DLT)-enabled national currency will support payments and banking activities within the country. Users will not need to swipe their credit cards or make payments using the regular e-krona. Instead, they will be able to complete everyday transactions via a DLT-enabled payments network.
Sweden is notably just the second country (the first one being the Bahamas) to introduce what seems to be a real, working version of national digital currency, or CBDC. The Bahamas began its CBDC testing program in December of last year and intends to officially launch its national digital currency during the second half of this year.
China has hinted several times that it’s creating its own CBDC, however, developments in the $13 trillion economy don’t appear to be as focused as in the Bahamas and Sweden.
Introducing a national digital currency in Sweden appears to be a good idea, because the nation is one of the world’s most cashless societies, with most locals opting for digital payments.