The Swedish Central Bank said that if the e-krona was put into circulation, it would be used to boost banking operations such as payments, ...
The Swedish Central Bank said that if the e-krona was put into circulation, it would be used to boost banking operations such as payments, deposits, and withdrawals from e-wallets.
Riksbank, Sweden's central bank, recently announced it has begun testing e-krona. Thereby, it brings the country closer to establishing the world's first central bank (CBDC) digital currency.
Riksbank said if the e-krona currency goes into circulation, it will be used to boost banking operations such as payments, deposits, withdrawals from e-wallets.
According to Riksbank, the purpose of this project is to reflect how the e-krona is used by people. Riksbank confirmed that paying by e-krona would be as easy as sending a message.
E-krona digital currency. (Source: cryptoknowmics.com)
CBDC is traditional money, but in digital form, issued and managed by a central bank.
Meanwhile, other digital currencies such as bitcoin were created through solving complex algorithms and controlled by many online communities instead of a central authority.
The downward trend of cash usage, coupled with competition from other digital currencies, such as Facebook's Libra, has prompted central banks around the world to consider issuing their own digital currencies.
Last January 2020, many large banks around the world joined the research team. To find out whether these banks should issue digital currencies in the context of declining cash usage and more and more people are turning to electronic payment.
The research team includes the European Central Bank (ECB), along with central banks in Japan, Canada, the United Kingdom, Sweden and Switzerland.
Former ECB top official Benoit Coeure and Bank of England Deputy Governor Jon Cunliffe will co-chair the team.
The new team says it will assess the possibility of issuing cryptocurrencies under the authority of the said banks in the host country. In addition, this group of central banks will also assess technical aspects and share knowledge on emerging technologies.
Sweden is currently the least dependent country on cash in the world. According to Riksbank's data, only 1% of Swedish Gross Domestic Product (GDP) was in cash form in 2018.
Meanwhile, this figure is 11% in the Eurozone, 8% in the US and 4% in the UK.
Riksbank said it has not yet made a final decision on whether to issue the e-krona digital currency. Also said that this test will last until February 2021 and use blockchain technology.
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