Sweden Takes another Huge Leap Towards Cryptos

Sweden is edging closer to doing away completely with cash in its society. The country announced that it is reviewing the possibility of introducing digital currency issued by its central bank. The review will be led by Anna Kinberg Barta, a former chairperson of Riksbank’s finance committee, and give its findings by the end of 2022. 

This review is one of the series of actions by the Sweden administration to remove cash from its economy. In February 2020, Sweden launched a pilot project with Accenture PLC, a consulting firm, to simulate the working of e-krona in its daily economy. Another project was the issue of a series of studies and papers in the last five years exploring what roles cryptos could play in society. 

Reimagining Sweden without Cash 

Sweden is a country on the move. It has been traveling the digital currency route for some time, with the percentage of cash payments going down from 40% in 2010 to only 15% by 2016. This decline was boosted by the COVID-19 pandemic, and by 2018, only about 1% of Swedish gross domestic product (GDP) was in banknotes. 

The scarcity of notes, alongside the growing convenience of using electronic payments, makes it pretty easy for society to shift to the cashless system. 

In one of the studies done on digital currencies and released in 2017, issuing e-krona would have limited impact on the monetary policy as well as the financial stability of the nation. The study also pointed out that it was unlikely to usurp the role of Riskbank in defining the economic direction of the country. This is becoming very important, especially with the entry of private companies into the digital currency ecosystem. 

However, Sweden has not figured out the best method of implementing cryptos. Per Bolund, Sweden’s financial markets minister, indicated that it is paramount that the crypto payments markets work safely.

Stefan Ingves, Riksbank governor, explained that policy-making around central bank digital currency is yet to be created. A formal decision is yet to be made on whether to issue or not to an e-krona.

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