CBDC in the Nordics: What is the status in Sweden, Denmark, Norway, Finland and Iceland?
Central bank digital currency (CBDC) is an exciting area of development from many central banks across the world, particularly in the Nordics. Some countries within the Nordics have taken the lead on these developments, while others remain more sceptical over how the benefits outweigh the risks.
Sweden
Sweden is Nordic country that has seen the most development with their CBDC. Swedish central bank Riksbank started investigating CBDCs in 2017, and in 2020, Phase 1 of the e-krona project started. Phase 2 of the project concluded in 2022.
In 2023, the Riksbank revealed they would be working on:
Investigating the effects of an e-krona on the Swedish economy; Testing of the technical solution for the e-krona prior to the e-krona pilot focusing on offline payments and sustainability; Investigating whether and how an e-krona affects the Riksbank's current mandate and what legal amendments are needed for the Riksbank to issue an e-krona; Having a dialogue with different authorities and the market, for example, via the external dialogue forum launched in 2022; Performing user studies aimed at end-users and traders; Preparing for a possible procurement of an issuable e-krona.Denmark
Denmark remains sceptical. In 2016 and 2017, the central bank of Denmark conducted research, but determined that digital currencies would pose significant legal, financial, and administrative challenges with no clear benefits for Danish society.
In June 2022, a paper was published that analysed new types of digital money, including CBDC. However, the sentiment remained unchanged.
Regarding retail CBDC, the report concluded: "At present, and with the associated costs and possible risks, it is not clear how retail CBDCs will create significant added
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