Sweden's central bank is urging lawmakers to reconsider plans for a digital krona, citing growing risks from foreign-currency stablecoins and the European Union's planned digital euro.
The Riksbank says an e-krona—which would give the public access to central bank money in digital form—is critical to ensuring the krona remains competitive as payment methods shift away from cash. A 2023 government inquiry concluded there was insufficient need for such a currency, but the central bank argues changing payment habits and emerging security risks warrant a fresh review.
Payment landscape transformation
Cash usage in Sweden has declined sharply. Just 5% of Swedes surveyed used cash for their most recent purchase, according to Riksbank data. This shift has prompted the central bank to warn that without a digital krona option, the currency could lose ground to more convenient digital payment instruments that work across borders.
Deputy Governor Per Jansson emphasized the concern, stating that if Swedish kronor are not available in a usable digital form, the krona may not be able to compete with other, more convenient digital payment instruments that can easily be used across borders.
Timeline and preparation
The Riksbank has not taken a formal position on issuing a digital krona but is calling on lawmakers to begin preparing legislation now. The central bank estimates the work would take at least five years to complete.
The institution also sees the e-krona serving practical functions beyond payments, including acting as a backup option during power or telecommunications outages, with offline payment capability among its potential features.
Broader digital currency developments
The Riksbank warned in a recent letter that stablecoins tied to foreign currencies could reduce demand for the krona, though it sees little immediate risk. The long-term threat remains a concern for monetary policy and financial stability.
Sweden could potentially draw on infrastructure being developed for the digital euro, which may launch in 2029 if EU lawmakers approve the necessary regulatory framework.
