New issue of the Riksbank’s journal Economic Review

News The second issue of Sveriges Riksbank Economic Review in 2020 has a special theme, namely central bank digital currencies (CBDC) and the e-krona. Regular readers of the Economic Review may remember that there was a theme issue on the e-krona in 2018 which summarized some of the work that had been done then. The Riksbank has since continued to delve into various aspects of CBDC, both from an analytical and a practical perspective. Some of this work is summarized in this issue. In more detail the articles are as follows

The articles in the second issue of the Riksbank’s journal Economic Review for 2020:

The rationale for issuing e-krona in the digital era

Hanna Armelius, Gabriela Guibourg, Andrew T. Levin and Gabriel Söderberg describe the rationale for providing e-krona to the public through a partnership between the Riksbank and supervised private payments service providers. They discuss the challenges facing the Swedish monetary system and consider potential ways forward to ensure that the monetary system remains efficient in the future.

Is central bank currency fundamental to the monetary system?

Hanna Armelius, Carl Andreas Clausen and Scott Hendry discuss whether central bank money that is available to all is fundamentally important for the national monetary system, focusing on the need for convertibility between commercial bank money and publicly available central bank money. This issue is particularly important for countries like Sweden, where cash is becoming marginalized.

Competitive aspects of an e-krona

Mats Bergman evaluates whether the introduction of an e-krona can be justified on
grounds related to market power and insufficient competition in the payment markets, today or in a future scenario where cash is absent. He considers inparticular the rapid decline of cash use in Sweden; the strong network externalities that characterise the payment market and its associated tendency towards natural monopoly; and the risks for monopoly profits and inefficiencies if the payment market becomes entirely private.

The Riksbank’s seigniorage and the e-krona

Peter Gustafsson and Björn Lagerwall discuss how the introduction of an e-krona could affect the Riksbank’s ability to generate profits. They also address the question of how high the demand for an e-krona would have to be to cover the Riksbank’s current expenses.

Central bank digital currencies, supply of bank loans and liquidity provision by central banks

Reimo Juks uses a theoretical model to analyze whether the issuance of a central bank digital currency (CBDC) can have adverse effects on the supply of bank loans and thereby macroeconomic activity. Among other things, he discusses banks’ measures to deal with increased outflows, and how central banks can offset the potentially adverse effects of CBDC on the supply of bank loans.

E-krona design models: pros, cons and trade-offs

Hanna Armelius, Gabriela Guibourg, Stig Johansson and Johan Schmalholz discuss how the e-krona and the related payments infrastructure could be designed in order to fulfil

Contact: Press Office, tel. +46 8-7870200
Updated 18/06/2020