Sweden Takes Another Step Toward a Digital Currency
Sweden is moving closer to eliminating cash entirely from its society. The country announced a review last week to study the possibility of introducing a digital currency issued by its central bank. Anna Kinberg Batra, a former chairwoman of the Riksbank's finance committee, will lead the inquiry, which is expected to end in November 2022.
The review is the latest in a series of steps taken by Sweden in recent years to remove cash from its economy. Back in February, it launched a pilot project with consulting firm Accenture plc (ACN) as a technology partner to simulate the workings of an e-krona in its daily economy in an «isolated test environment.» The Riksbank, Sweden's central bank, has also issued a series of papers and studies in the past five years discussing the role that a digital currency administered by it could play in society.
Sweden has been traveling the digital currency route for some time now. The percentage of cash payments in the country declined from 40% in 2010 to 15% by 2016. The pandemic has further accelerated the trend: the Riksbank estimates that cash usage is now less than 10% of the overall economy. As of 2018, about 1% of Sweden's gross domestic product (GDP) existed in banknotes. The scarcity of cash coupled with the convenience of electronic payments should make it easier for Swedish society to tip into a cashless future.
According to a study on central bank digital currencies released in 2017, issuance of an e-krona would have limited effects on the monetary policy and financial stability of the country. It was also unlikely to displace the pivotal role played by the Riksbank in determining economic direction. This is especially important considering the entry of private corporations into
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