Sweden’s Riksbank is looking into the issuing of digital money, the e-krona, said the c-bank’s deputy governor Cecilia Skingsley during the forum FinTech Stockholm on Wednesday.
“Will we have e-krona in an e-wallet in the future, as naturally as we now have a wallet with cash in it? The less those of us living in Sweden use banknotes and coins, the clearer it becomes that the Riksbank needs to investigate whether we should issue electronic money as a complement to the money we have today,” she said, quoted by the bank’s website. “If the market can make use of the new technology to launch new and popular payment services, why shouldn’t the Riksbank be able to do the same?”
According to Skingsley, the central bank has not taken a decision on issuing the e-krona as of yet, as there are a number of technical, legal and practical issues that need to be investigated first.
She also clarified that the e-krona will not entirely replace cash, but will act as a compliment to it and Riksbank will not stop issuing paper money and coins, as long as there is demand in the society for them. “It is our statutory duty and we will of course continue to live up to it,” Skingsley said.
It is worth noting, however, that Sweden is becoming an increasingly “cashless society”, and according to some statistics, the amount of notes and coins in circulation in the country has fallen by 40% since 2009 and people are increasingly using bank cards, smartphones and electronic payment systems to handle their money transactions. Ironically, Sweden was the first country in Europe in which paper banknotes appeared, back in the 166os.
“The declining use of cash in Sweden means that this is more of a burning issue for us than for most other central banks. Although it may appear simple at first glance to issue e-krona, this is something entirely new for a central bank and there is no precedent to follow,” Skingsley said.
In an interview for Financial Times Skingsley said Riksbank was still in the early stages of the project and most likely, if at all, the e-krona could be introduced within two years. If this happens, Sweden would be the first country giving access to the general public of electronic money issued by the central bank.
Sveriges Riksbank is the world’s oldest central bank and the third oldest bank in the world still in operation. It was established in 1668 and has been acting as a central bank since 1897, when the first Riksbank Act was accepted. Since 1904 Riksbank has the monopoly to issue banknotes and coins in Swedish krona.