Payments Report 2026

Article – Money in transition – traditional and new forms

In recent years, new forms of money have started to emerge alongside the traditional ones. In this Article, we discuss the difference between different forms of money – traditional and new – and how they are used for payments.

Published: 12 March 2026

Money serves as a measure for pricing goods and services, as a widely accepted means of payment, and as a way to save and preserve value over time. For something to function as money, the public needs to have confidence in it and trust that it will retain its value over time. In addition, the public needs to be able to use the money to make payments and receive payments in a smooth and easy way.

Money can be divided into two categories: government-issued money, in the form of cash and money held in accounts with the central bank, and privately issued regulated money, in the form of money held in accounts with commercial banks and e-money.

When these different types of money are issued in a country's currency, they act as a representation of the national currency. The level of public confidence in money therefore depends on the country's monetary policy, among other things. Inflation affects the value of all money issued in the country's currency. A stable level of inflation ensures that money retains its value and can be used to buy roughly the same amount of goods and services over time, as shown in Illustration 3.

Illustration 3: Three key conditions for building trust in money

The figure shows the conditions that money representing a national currency needs to have to enjoy public confidence.

There is money issued by the government through the central bank and money issued by private actors, such as banks. Unlike the central bank, private actors can go bankrupt, which means there is a risk of people losing their money. To reduce this risk, support financial stability and build trust in private money, various rules and guarantee schemes have been put in place.

We often take it for granted that our money is worth the same regardless of which bank we keep our money in or whether we keep it in an account or as banknotes in our wallets. In other words, one krona is one krona everywhere in Sweden, regardless of who issued the money – this is what is known as the “singleness of money”. However, as different issuers issue money in the same currency, it is not a given that all payments will be accepted at face value. To ensure this, you need to be able to exchange different types of money without them losing value. For example, if someone pays in a shop with a banknote, the shop needs to be able to safely and cheaply deposit the banknote in a bank account – that is, convert the banknote into bank money. The same applies when the payer and the payee use bank money held and issued by two different banks. This means that money in one bank needs to be convertible into money in the other bank. This usually happens automatically between the various issuers of the money without requiring any involvement of the payer and the recipient – here the Riksbank and the financial infrastructure play a key role, as described in more detail in the section “Central bank reserves play an important role in the payment system” in this article.

Below we list the types of money issued in a national currency, such as the Swedish krona, and describe their purpose and characteristics. It is also made clear that money can come in different technical forms. We also discuss various crypto-assets and explain why they are not considered as money.

Illustration 4: Traditional and new forms of money

The figure shows that money can be issued by the government or by private actors. There are different types of money that exist in different technical forms.

Table 1.A. Traditional and new forms of money

A: Government-issued money – represents a national currency
Money	Purpose and characteristics	Technical form and use in payments
1) Cash	Available to the public. Free from financial risks. Non-interest bearing . For payments, the payer's cash is transferred to the recipient. For the recipient to accept the payment, they must be able to convert the cash into other money without loss of value .	A traditional physical form of money used mainly in physical trade and in person-to-person payments.
2) Central- bank- reserves (“the banks’ money”)	Not available to the general public but only to banks, e-money institutions and similar organisations. Free from financial risks. May be interest-bearing. Used in the settlement of payments where the payer's money needs to be converted into the payee's (see bank deposits and e-money below). Settlement in central bank money ensures that different privately issued money always holds its full value when used in payments.	A traditional digital account form of money used to settle payments between financial institutions. These payments involve traditional forms of money and assets and are recorded in accounts at the central bank. Wholesale CBDC is a new technical form that does not exist in Swedish krona at present. They can be used to streamline and improve the settlement of payments between financial institutions, especially in transactions involving new types of money or assets, such as tokenised bank deposits or tokenised securities.
3) Retail CBDC or e-krona Not available in Swe-dish kronor today	Available to the public. Free from financial risks. Usually non-interest bearing. Complementing cash. For payments, the payer's retail CBDC is transferred to the recipient. For the recipient to accept the payment, they must be able to convert the retail CBDC into other forms of money without loss of value.	Retail CBDC is a form of central bank digital money that can take different technical forms. This is intended for use in traditional payment services, such as retail and person-to-person payments.

Source: The Riksbank.

Table 1.B. Traditional and new forms of money

B: Privately issued money – represents a national currency
Money	Characteristics	Technical form and use in payments
4) Bank deposits	Available to the public. Risks are managed through banking regulation, supervision and guarantees. Government deposit guarantee and interest-bearing. Generated by new loans to the public or by the banks' asset purchases. For payments, settlement takes place by converting the payer's bank money into the payee's bank or e-money. This process is automatically managed by financial institutions using central bank reserves. These are currently the most common form of money for the public.	A traditional digital account form of money used in traditional payment services such as bank transfers, invoices, Swish, cards, and cross-border payments. Tokenised bank deposits is a new technical form that does not exist in Swedish krona at present. This can be used for payments involving crypto-assets and tokenised assets, as well as to improve traditional payment services, for example by making cross-border payments faster and cheaper. It can also be used for more customisable payments that are made automatically when certain conditions are met.
5) E-money	Available to the public. Risks are addressed through e-money regulation and the MiCA Regulation. No deposit guarantee and no interest. Created against receipt of other money. No lending allowed. In the case of payments in traditional account form, settlement takes place by converting the payer's e-money into the payee's bank funds or e-money. This process is automatically managed by financial institutions using central bank reserves. For payments in a tokenised form, the payer's e‑money token is transferred directly to the payee. For the payee to accept the payment, they must be able to convert these e‑money tokens into other forms of money without loss of value.	A traditional digital account form of money used to enhance traditional payment services, such as cards and cross-border payments. E-money tokens (EMTs) are, according to the MiCA Regulation, stablecoins that aim to maintain a stable value in relation to a single national currency, such as the US dollar. A new technical form not currently available in Swedish kronor. They can be used in payments involving crypto-assets and tokenised assets.

Source: The Riksbank.

Table 1.C. Traditional and new forms of money

C: Assets with certain money-like characteristics – do not represent a national currency
	Purpose and characteristics
Asset referenced tokens (ART) are, according to the MiCA Regulation, stablecoins that aim to maintain a stable value in relation to an asset or a basket of assets rather than a single national currency. This basket of assets can include commodities such as gold, several national currencies or other crypto-assets.	Their issue is regulated by the MiCA Regulation in the EU. Does not fulfil the requirements for e-money.
Crypto-assets without underlying assets (for example Bitcoin).	No responsible issuer. Volatile value when calculated in a national currency. Not used to price goods and services. Investment asset that usually first has to be sold and converted into money in a national currency to be used for payments.

Source: The Riksbank.