Swedish Central Bank Resumes Discussion on Digital Krona

The Central Bank of Sweden is urging lawmakers to revisit the issue of a digital krona, warning that foreign currency stablecoins and the planned digital euro could weaken the krona's role in payments. This was stated by Riksbank in a recent letter.

The e-krona would provide the public with access to central bank money in digital form. A 2023 government study did not find sufficient necessity for such a currency, but Riksbank believes that changes in payment methods and growing security risks could justify a new review. "If our cash becomes digital and Swedish krona is not available in a suitable digital form, the krona may not withstand competition from other, more convenient digital payment tools that are easy to use across borders," Deputy Governor Per Jansson told Reuters on the sidelines of a conference.

Riksbank has not taken a position on the issuance but wants lawmakers to start preparing the legislative framework now: it would take at least five years to launch. Cash usage in the country has sharply declined – only 5% of surveyed Swedes paid in cash for their last purchase, according to Riksbank. Moving away from the krona, the bank warns, would make it difficult to manage the economy and protect financial stability.

In the letter, Riksbank noted that stablecoins pegged to foreign currencies could reduce demand for the krona. In the near term, the bank sees few risks, but the long-term threat remains. The e-krona is also considered as a backup payment option during power or communication outages; among potential features are offline payments. To build the system, Sweden could use the digital euro infrastructure, which could appear in 2029 if EU lawmakers approve the necessary regulations.