The e-kroon – government money in digital form

E-kroon – government money in digital form

Today, the public has access to Swedish kroner in two forms – government-issued money in the form of cash, i.e. banknotes and coins, and digital money issued by private agents. Of this privately issued money, deposits at commercial banks are the most common, but electronic money is also available although it is not as common in Sweden. (Read more about different forms of money at: What is money?.

A digital central bank currency, an e-kroon, could give the public a sustained opportunity to choose between government and private money when making payments. This is one of the reasons why the Riksbank is investigating the possibility of issuing a so-called e-kroon – digital central bank money (or CBDC, central bank digital currency, this is how the concept is referred to internationally). The Riksbank’s work on an e-kroon is a way to meet the challenges of the future and digitalisation. The e-kroon will not replace cash, but will complement it.

The Riksbank sees an e-kroon as a possible component in our long-term efforts to manage the challenges of digitalisation.

An e-krona can ensure the ability to exchange every kroner deposited in a Swedish bank into money issued by the Riksbank. This is important because it means that a crown is worth the same regardless of which bank it is in. The Riksbank and other central banks usually say that cash and central bank digital currency ensure that we have a unified monetary system.

The Riksbank is of the opinion that the e-kroon can also strengthen the resilience of the payment market. This will complement the supply of money and payment services from the private sector. It is important that there are several alternatives in the event of serious disruptions to bank or card company systems. The e-crown can also work offline.

The e-kroon will also contribute to the renewal of the payment market. By providing an e-kroon, the Riksbank can give agents other than banks direct access to an alternative payment infrastructure in which they can offer payment services to their customers. It can help small and new players to develop new innovative solutions and products that can boost competition in the payments market.

An e-crown can also play a role in strengthening financial inclusion by allowing a more active role for the state that will provide payment services to those currently excluded.

About the Riksbank’s e-kroon project

The Riksbank started the e-kroon project in 2017 to analyze the need for an e-kroon. The project team held a dialogue with various national and international agents to exchange experiences, analyzed various technical solutions and investigated the legal issues that need to be addressed to ensure that the Riksbank has a clear mandate to issue an e-kroon reach

The e-kroon pilot – tested a technical solution for the e-kroon

In 2020, the Riksbank entered a more practical phase of the e-crown project. To test how an e-kroon could look and function, the Riksbank started an e-kroon pilot project, together with the company Accenture, to build a possible technical platform for the e-kroon. The aim of the project was for the Riksbank to learn more about how a technical solution for the e-kroon could work. The work of the e-krona pilot enabled the Riksbank to learn more about the possibilities offered by the solution. In the future, we can use this technical work, after comparison with other technical solutions and models, for a possible e-crown. The technical pilot project was completed in 2023.

Reports on the e-crown

Within the e-kroon project, the Riksbank has drawn up five reports in which you can read about their analysis and conclusions so far.

Read in-depth about the e-crown

The magazine Sveriges Riksbank Economic Review published two special issues about the e-kroon:

Political decision to introduce an e-krona in Sweden

Whether or not an e-krona should be introduced in Sweden is ultimately a political decision. An investigation into the role of the state in the payment market, which was presented in March 2023, assessed that there is currently insufficient social need for the Riksbank to issue an e-kroon. However, global changes may lead to a different assessment in the future. In its consultation response, the Riksbank points out that work on the development of legislation for a possible e-kroon should start now, in order to shorten the implementation period if the introduction of an e-kroon becomes relevant later. Changes in the world around us that may affect Sweden include market developments, as well as the work of the European Central Bank (ECB) in preparing a digital euro and the European Commission’s legislative proposal on a digital euro. An e-kroon can also ensure that the Riksbank’s responsibility to ensure safe, efficient and accessible payments can be achieved in the future in a payment market that is constantly developing.