While several countries have stated that they are mulling over the possibility of an officially sanctioned digital currency, Sweden appears set to become the first to launch its own central bank cryptocurrency, called the e-Krona.
As per a report by Business Insider, HSBC economist James Pomeroy sent clients a note titled “Sweden’s big year: Can the economy overcome some challenges?” this week. The note observes that the Swedish central bank Riksbank, which has been an international leader in terms of advocating the development of national cryptocurrencies, may become the first to launch its own, called the e-Krona.
The release of an e-Krona would make sense, since cash usage rates in the Scandinavian country’s economy are dropping, and are among the lowest in the world. However, it is unlikely to happen anytime soon; Pomeroy noted that the officially sanctioned cryptocurrency would probably be introduced within the next few years, as “2018 may be a little too soon”.
The Riksbank has a history of pioneering new economic developments. As per a speech by the bank’s governor Stefan Ingves last year (referenced by Pomeroy in his note):
“It was in Stockholm that the first modern banknote was created more than 350 years ago, and that it is here, in Sweden, that cash is currently taking its last breaths. Perhaps the Riksbank will be writing history again.”
Pomeroy went on to note that the Riksbank has displayed definite interest in a central bank cryptocurrency. The Swedish central bank has published numerous research articles on the topic, which suggest that the bank will need to find a new way to provide citizens access to payments (without going through an intermediary) in the face of decreasing rates of cash usage.
“The so-called e-Krona will have to be able to be used for small purchases, as a claim on the Riksbank and be accessible by companies, individuals and financial institutions at all times,” Pomeroy observed.
In a report published on the topic, the Riksbank has discussed two ways in which the e-Krona could function – under a value-based system, and a register-based system. The central bank might also consider using a combination of both systems.
While Riksbank certainly seems more committed than most, it is not the only central bank considering a state-sanctioned cryptocurrency. Israel has expressed its interest in a digital version of the shekel, while Russia has also been contemplating a CryptoRuble.