The Swedish government was one of the first in Europe to explore a possible Central Bank Digital Currency (CBDC). It has now moved into an exploratory phase, with a panel studying the potential benefits and consequences of digitizing its currency.
Ready to Roll
On Friday, Blomberg reported that the Swedish government had launched a formal review of a possible e-krona. The review will explore the feasibility of moving its currency into the digital standard, utilizing its current digital payments infrastructure.
The Nordic country has one of the world’s most advanced cashless payment systems, and many believe that transitioning into a full-fledged CBDC won’t take as much effort as others. The initiative will be led by Anna Kinberg Batra, a former chairwoman of the Riksbank’s finance committee.
Per Bolund, Sweden’s financial markets minister revealed that the government expects to complete the review by the end of November 2022.
Bolund emphasized the need to ensure that the country’s digital payments infrastructure functions safely and inclusively. He added that depending on the technology’s design and utilization, it could have substantial consequences for its financial system.
The Question of Time
When it comes to CBDCs, most countries are in the exploratory phase. The European Union has confirmed that plans will explore a possible digital Euro soon, with the region looking to bolster digital payments and improve its overall economy.
However, even that effort still seems to be a long shot. The European Central Bank (ECB) believes its exploratory efforts would yield results in 2021, and it will begin drafting the module for the digital Euro then.
Experts from several European banks believe proof of concept for the digital Euro could arrive in the next half-decade. The panel, titled “Upgrading Money to the Digital Age: Introducing Digital Euro,” saw everyone agree that the most pressing task will be getting everyone on board with the specifics of the digital Euro. With that in mind, implementation could take years on its own.
Austėja Šostakaitė of the European Central Bank pointed out that the bank won’t even decide on whether to pursue the digital Euro until the middle of 2021. For her, the primary issue will be introducing the asset into the European financial ecosystem and ensuring that it collaborates effectively with bank money.