This is what an e-krona could look like

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Will Sweden get the krona in an electronic format, the so-called e-krona, as a complement to cash? This question is currently being investigated by the Riksbank. The reason for this is that digital payments, for example by card, are in the process of eliminating payments using banknotes and coins. This trend towards a cashless society could ultimately make society vulnerable in that the payment market would be concentrated among a small number of private participants.

E-krona

 

The proportion of cash payments in the retail sector fell from 40 per cent in 2010 to 15 per cent in 2016. If this trend continues, Sweden may, in the not-too-distant future, become a society in which it is no longer possible to pay using cash. This development is unique from an international perspective.

Digitalisation may have undesired effects

The electronic money and means of payment currently existing on the Swedish payment market are entirely run by private actors and are concentrated among a small number of commercial actors, payment services and infrastructures. In the long run, this concentration could restrain competitiveness in the market and make society vulnerable. The development towards an almost cashless society also entail households having little opportunity to save and pay with risk-free central bank money and this could lead to the payment system becoming sensitive to shocks.

The e-krona as a complement to cash

The Riksbank is now investigating whether it would be possible to issue a digital complement to cash, the so-called e-krona, and whether such a complement could counteract some of the problems that could arise on the payment market in the future. An e-krona could thereby support the Riksbank in its task of promoting a safe and efficient payment system. However, the Riksbank has not yet taken any decision on issuing an e-krona.

This is what an e-krona could look like

The interim report from the Riksbank's e-krona project published today describes the possible characteristics of an e-krona:

 

  • The e-krona is primarily intended for smaller payments between consumers, companies and authorities.
  • The e-krona constitutes a direct claim on the Riksbank, is specified in Swedish kronor and can be held by the general public, financial institutions and companies. It is an asset in real time, 24 hours a day, 365 days a year.
  • The e-krona does not accrue any interest, but should have a built-in function to make it possible to accrue interest at a later point.
  • E-krona accounts should be combined with a value-based solution that makes it possible to pay small amounts offline and that increases availability for groups unwilling or unable to hold an e-krona account.
  • The Riksbank will provide the basic functions for the e-krona, but is investigating the possibility of using the existing digital infrastructure and invites external actors to propose how applications used by the general public should be designed.

The Riksbank hopes to encourage dialogue

With this report, the Riksbank wishes to encourage an open dialogue with various participants in society who may have important points of view and lessons to contribute, such as authorities, politicians, financial markets and technology suppliers.

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