Ingves: The Riksbank shall play an active part on the payment market
“The payment market has transformed rapidly in recent years and we will see even more changes in the period ahead.” These were the words of Stefan Ingves in his annual speech to the Swedish Economics Association at the Stockholm School of Economics today. We can make instant transfers by Swish and increasing numbers of people want to be able to utilise rapid payments of this kind. Increasingly often, cash has to step back for payments with cards or Swish. If cash disappears completely, the general public will no longer have access to central bank money – money guaranteed by the central government.
Date: 04/06/2018 12:15
Speaker: Governor Stefan Ingves
Place: The Stockholm School of Economics
Demand for payments in real time
In Sweden, the Riksbank has a very important task, namely to ensure that payments in Swedish kronor also function safely and efficiently in the future. When technological innovations, changing payment habits and European integration of technological systems cause the market to change, the Riksbank must adjust to developments, Mr Ingves continued.
Among other things, we are planning to modernise our settlement services. As payments in real time are being demanded increasingly often, I think we should also extend the opening hours of RIX and ensure that our systems are constructed so that we can offer the possibility of settling payments in central bank money in real time, he said. This is necessary to ensure the market does not start to use alternative, less efficient solutions. "I think it is important that central government – in the form of the central bank – also plays an active role on the payment market in the future", Mr Ingves pointed out.
Cash could be complemented by an e-krona
A little over 350 years ago, Stockholms Banco, which later became the Riksbank, became the first issuer of modern paper banknotes because people wished to avoid having to carry heavy copper coins around. We are now facing a situation in which cash is disappearing at a rapid rate. This makes it natural to ask whether central banks should offer the general public a secure electronic alternative that could work in approximately the same way as cash. It is for this reason and others that we, at the Riksbank, have opened an analysis of the possibilities for issuing a so-called e-krona.
"Perhaps we will be among the first in the world to launch a new kind of central bank money, a kind adapted to today's digital society and the needs that exist there", noted Mr Ingves.