Sweden’s central bank, Riksbank, has released its third report on the potential implementation of a central bank digital currency (CBDC).
The report highlights concerns around retail payments and conditional payments. The Riksbank began exploring the possibility of a CBDC in 2020, with collaboration with existing private payment services as its initial focus.
Governance was identified as a key question for collaboration, with options divided into three levels, ranging from a set of guidelines to a Riksbank-operated app. The report notes that the setting of these parameters could significantly impact innovation.
The Riksbank also reported on the successful trial of a conditional payment for a car purchase, demonstrating the e-currency’s programmability.
However, it also raised privacy questions due to the extra information required for the transaction. Additionally, the report highlighted that the transparency inherent in the system could have implications for bank secrecy and could be useful in uncovering bad behavior by service providers.
Although the Riksbank has not made any decisions on the issuance of a CBDC, the report emphasized the urgency of the discussion.
With cash taking a back seat to digital services from private actors, the Riksbank’s direct role in the payment market is reduced, potentially making it more difficult to promote a safe and efficient payment system accessible to all. The e-krona is being suggested as a potential solution to this problem.
The report also touched on the Riksbank’s involvement in Project Icebreaker, which involves cross-border retail payments and remittances. However, the report’s focus was on a collaborative model for retail payments and conditional payments.
The Riksbank believes that such a model could help ensure that e-krona serves the entire population and does not become like a gift card.
The Riksbank’s report demonstrates the careful consideration that is being given to a potential CBDC in Sweden. While there are concerns around privacy and bank secrecy, the potential benefits of a digital currency in terms of promoting a safe and efficient payment system accessible to all are clear.
The report’s emphasis on collaboration with private payment services and a standardized interface and range of services for the e-krona shows that the Riksbank is exploring all options for the potential implementation of a CBDC.
Riksbank e- krona
In conclusion, Sweden’s Riksbank has released its third report on the potential implementation of a CBDC, with a focus on retail payments and conditional payments.
The report highlights the urgency of the discussion, with the e-krona being suggested as a potential solution to the reduced direct role of the Riksbank in the payment market.
The report emphasizes collaboration with private payment services and a standardized interface and range of services for the e-krona, demonstrating careful consideration for a potential CBDC in Sweden.