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Sweden's Digital Currency Efforts With 'E Krona' May Come to Fruition in 2 Years

Sweden's Digital Currency Efforts With 'E-Krona' May Come to Fruition in 2 Years

By Agence France-Presse | Updated: 18 November 2016 16:24 IST

Sweden's central bank is considering issuing a digital currency called "e-Krona" within two years in the Nordic nation where cash transactions are declining, officials said Wednesday.

"Should the Riksbank issue electronic means of payment in the same way as we now issue cash?" Cecilia Skingsley, deputy governor at Riksbank said during a speech in Stockholm.

But the world's oldest central bank has not yet decided if it will be the first to supply a digital currency as legal and technical issues need to be resolved.

"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.

Sweden is not the only country to investigate this move, she noted, citing discussions on the matter this year by the Bank of England and the Bank of Canada.

Since 2015, Ecuador has allowed its citizens to make small payments by mobile phone in Dinero electronico ("electronic money"), a virtual currency managed directly by the central bank, worth as much as the American dollar, and which mainly targets the half of the population without a bank account.

"The low use of cash in Sweden means that this is more of a burning issue for us than for most other central banks," she said.

But Skingsley underlined that if Riksbank decides to issue the e-krona the it would not replace cash but rather serve as a complement.

"The Riksbank will continue issuing banknotes and coins as long as there is demand for them in society," she said.

According top the central bank, cash withdrawals have fallen by about one third over the last five years in Sweden, where 97 percent of the population uses a bank card.

Cash usage has dipped and card payments have jumped by around 50 percent in the last five years.

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