Sweden’s central bank, the Riksbank, is reportedly starting to test its own central bank digital currency, the e-krona, in a bid to determine its potential use.
According to local news outlet The Local, the central bank’s pilot scheme comes years after the financial institutions initially revealed it was looking into creating its own digital currency. The e-krona is a blockchain-based digital currency that won’t be replacing cash in the country but will complement it.
The pilot project is reportedly set to run in “an isolated test environment” with digital tech consultants overseeing it. While the Riksbank is testing whether the e-krona can be used by the general public. The bank detailed it should meet certain criteria if it’s ever launched:
The aim of the project is to show how an e-krona could be used by the general public. A digital krona should be simple, user-friendly as well as fulfill critical requirements for security and performance.
The test will see participants use a digital wallet to make payments, deposits, and withdrawals. It will also be possible to use it via debit cards and smartwatches. The pilot project is set to run until February 2021 while the Swedish central bank collaborates with other financial institutions to discuss central bank digital currencies.
Despite the test, there’s no official information confirming the Riksbank is indeed launching the central bank digital currency. The central bank has in the past made it clear it isn’t looking to replace cash in Sweden, although its use has been slowly dropping. Specifically, in 2010 40% of swedes used cash for payments, while only 13% used it in 2018.
Even if the e-krona launches, the report details, the Riksbank will continue to issue coins and notes to meet demand. Other central banks, including the European Central Bank, are mulling launching their own digital currencies.