Swedish authorities have announced plans for a step-by-step replacement of the traditional krona with a digital equivalent, signaling a potential shift away from paper money in one of the world’s most cashless societies.
A detailed review of the possibility was launched earlier this week, and is expected to be completed by the end of November 2022, according to the country’s financial markets minister, Per Bolund.
It followed the launch of a pilot Central Bank Digital Currency (CBDC) earlier this year. The ministry reportedly set up a committee to oversee the review headed by Anna Kinberg Batra, a former chairwoman of the central bank’s finance committee.
Sweden is among the world’s pioneers when it comes to integrating a digital currency into a national financial system. Earlier this year, the Riksbank, the country’s central bank, launched a pilot project to introduce an electronic krona based on the same blockchain technology that underpins digital currencies like bitcoin. The government will officially launch e-krona as soon as the review is completed.
“Depending on how a digital currency is designed and which technologies are used, it can have large consequences for the entire financial system,” Bolund told Bloomberg, stressing that “it’s crucial that the digitalized payments market functions safely, and that it’s available to everybody.”
The use of paper money in Sweden has significantly declined in recent years, with that trend strongly reinforced during the peak of the coronavirus pandemic. The national mobile payment system, Swish, has bolstered the move since it was introduced in 2012 by Sweden’s six largest banks.
In 2018, the kingdom was ranked among the world’s most cashless societies by the Bank of International Settlement (BIS). Swedish retailers are projected to stop accepting fiat money for payment by 2023.
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