In an interesting development, Sweden’s central bank, Riksbank, declared that it intends to engage in testing a digital currency, which is known as e-krona. The country is known to have friendly atmosphere towards the emerging asset class despite ambiguity in the sector. The IMF head, Christine Lagarde, indicated that global central banks could come up with state-backed cryptocurrency.
The Sweden Central bank will engage its e-krona as a pilot project so that it could be tested for suitability aspects of various virtual currencies. However, the Riksbank is yet to take a firm stand as far as the launch of a national e-krona is concerned, i.e., whether a near-term or long-term possibility. The central bank is keen to use it to find out as to how the digital currency could be employed.
The Riksbank is also keen to understand how to offer the access to the general public a state-backed payment means. At the international levels, there is a growing interest in the digitalized economy relative to the cash economy. This would mean that there should be sufficient encouragement to the digital currencies and its usage across the sectors so that the acceptance level could get accelerated. A state-backed digital coin will generate more interest among users.
Sweden’s central bank has preferred to initiate the pilot project after seeing the drop in cash usage, as well as, cash-based transactions in the country. For instance, the ruling Social Democrats have indicated a plan in 2016 that enables the country to move towards the first cashless society by the year 2030 in the world. The central bank is also getting enough support from the commercial banks and sectors on its e-krone initiative.
However, there are skepticisms whether the government will be in a position to meet the deadline of 2030 for a cash-free economy. The key factor is that unlike any other country, the banks in Sweden support the plan. Another important thing is that most bank branches in the country have stopped offering over-the-counter service to its customers for cash-based transactions.