Sweden began to test digital currency because of unwillingness of people to use cash

2020: Sweden began to test digital currency because of unwillingness of people to use cash

At the end of February, 2020 the central bank of Sweden Riksbank started an annual pilot project on use of electronic krone. It is considered that Sweden began to test digital currency because of unwillingness of people to use cash. Within the project the blockchain technology which is used by cryptocurrencies will be used.

Almost each citizen of Sweden uses the mobile Swish payment application, and it is considered, retailers can stop acceptance of cash by 2023. These news concern the central banks of the country for two reasons. First, they are afraid that if payment infrastructure is completely provided to the private sector, some groups of people can be excluded from it. Secondly, if citizens lose an opportunity to convert digital currency into shape of "cash" kept by the government it can undermine their belief in a monetary system.

In February, 2020 Riksbank started an annual pilot project on use of electronic krone

Therefore a few years ago Riksbank began to investigate a possibility of creation of the digital currency supported by the state which could play the role similar to that which is played so far by physical cash. The economist of Riksbank Gabriel Söderberg claims that unlike private companies which are guided by profit the central bank will be concentrated on public benefit. Creation of a digital payment system, Sweden, user-friendly and available to all citizens, is significant for it.

According to the press release, the pilot project will last until the end of February, 2021. But so far economists are faced by a set of tasks as Soderbergh claims that the decision on release of electronic krone is still not made. Soderbergh considers that the decision on release of sovereign digital currency should be made with participation of wide circles of the population of Sweden.^[1]

2019: Accenture will create digital krone for Sweden

In the middle of December, 2019 it became known that the Central bank of Sweden attracted Accenture to project development on creation of electronic currency under the name e-krona (electronic krone).

For Sweden it is the next step to digitalization of a financial system. It is known that the Central Bank of the country since 2016 studies a possibility of release of own digital currency designed to become effective and safe means of payment.

The central bank of Sweden attracted Accenture to project development on creation of electronic currency under the name e-krona

Main objective of the project — assessment of technological capabilities of digital currencies — representatives of the Central bank of Sweden explained.

The management of bank watches closely development of new currencies in the world. The head of bank called the Facebook Libra project "incredibly important catalyst" of the financial world and noted that similar initiatives induced many banks of the world to be prepared for digital transformation.

Accenture stated that it develops new electronic currency, being guided by the consumer and is going to start electronic krone in a test environment with simulation of several shops that in practice to estimate its advantages and shortcomings. The initial contract with Accenture is signed for one year, but the Central bank of Sweden claims that it is ready to prolong it for carrying out tests for the whole seven years.

It is remarkable that the reports of the Central bank prepared in 2017 and 2018 speak about unwillingness of the management to base new digital currency on technology of a blockchain or the distributed ledger (DLT) which the bank called "inefficient technology". However in the report for 2018 it is mentioned that "the electronic krone should have an opportunity to interact with solutions on the basis of DLT". So far it is not clear what technology will be used by the electronic krone created by Accenture.^[2]

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