Libra has been advancing towards its introduction into global markets and is acting as a catalyst for nations to adopt their own cryptocurrencies or Central Bank Digital Currency (CBDC). Sweden has become an addition to nations which are developing their electronic version of cash. Sweden is also set to become the world’s first cashless economy by 2023, hence, introduction of the digital cash will create more opportunities in the economy of Sweden. The digital cash, named e-krona, would use Distributed Ledger Technology and shall be introduced by Riksbank, Sweden’s central bank. E-krona is in the pilot stage currently and is expected to launch by 2021. Swedish officials fear that since almost all retailers are moving towards a cashless acceptance, there should be a cash system that is focussed on public good and not just profit. The pilot project for e-krona is being developed with Accenture, a multinational professional services company. We believe that there may be early adoption of e-krona among Swedish citizens as certain retailers in Sweden have gone completely cashless, making it impossible to pay in actual paper currency. A survey conducted through Riskbank portrayed that a mere 13% of the respondents used paper currency to actually pay for the transactions. [1]
E-krona introduction would require it to be compatible with digital wallets, cards, mobile applications and smart watches to facilitate a mass adoption among the Swedish citizen. When compared with developing countries, Swedish citizens are keener in adopting a digital banking system rather being cautious about the same. The e-krona functioning would take place through the RIX system, which is the current central bank method of the Riksbank which handles transfers between accounts of different bank. The user would require to deposit their reserve with the branches to obtain e-krona, post which it can be used to make transactions through a digital wallet. The entry of the user into the network would be overseen by Riksbank. The transactions, according to the pilot would be recorded on the Corda DLT, developed by US based R3 blockchain company.
The development of e-krona would advance digital adoption amongst the remainder of merchants and retailers in Sweden and will increase the growth of the cashless economy of Sweden.
[1] Payment Patterns in Sweden for 2018. Available at- https://www.riksbank.se/globalassets/media/statistik/betalningsstatistik/2018/payments-patterns-in-sweden-2018.pdf
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