The Swedish government is progressing with its central bank digital currency, or CBDC, by launching a formal review of a potential transition to the digital currency.
According to a Dec. 11 Bloomberg report, the review will explore the feasibility of moving the country’s payments infrastructure to a digital currency. The country features one of the most cashless economies in the world.
Per Bolund, Sweden’s financial markets minister, reportedly said that the government expects to complete the digital currency review by the end of November 2022. Anna Kinberg Batra, a former chairwoman at the finance committee Sweden’s central bank Riksbank, would lead the initiative.
Bolund emphasized that it is crucial to ensure that the digital payment system in the country the functions in a safe way, and is “available to everybody.” “Depending on how a digital currency is designed and which technologies are used, it can have large consequences for the entire financial system,” the minister said.
Sweden has emerged as one of major CBDC technology pioneers, announcing a pilot platform for a digital currency known as e-krona in late 2019. In order to build the platform, Sweden’s central bank partnered with Irish professional services company Accenture. The Riksbank launched its first e-krona pilots in February 2020, claiming that the testing will be in operation until February 2021.
In October 2020, Riksbank Governor Stefan expressed confidence that an e-krona should be issued by the central bank and recognized as legal tender. Last year, Stefan said that Sweden’s central bank cannot be the only institution to decide on future of an e-krona implementation:
“Considering how economically important the issue is, the Riksbank cannot take the decision on its own as to whether an e-krona should be introduced and, if so, in what form. It is a decision that must have substantial political support […]”