Sweden could issue a national digital currency

Sweden is considering whether to launch its “ekrona”, an electronic or digital version of the Swedish krona. The Riksbank was the first central bank in the world to issue paper notes in the 1660s, thanks to the development of the newest printing technology. Today, new technologies exist for payments. Sweden explores all the possibilities (technological, legal …) and the consequences of such an initiative. The Central Bank is very pragmatic in considering all possibilities, recognizing that it has never embarked on such an ambitious project.

However, the “e-krona” will not replace the krona, but would be its complement. The Bank of Sweden will continue to issue banknotes and coins as long as there is a demand. Swedes use less and less tickets and coins.

The volume of banknotes and coins in circulation has decreased by 40% since 2009, due to the growth of online purchases and card payments. This pushed the Riksbank to think about new ways of issuing money in Sweden. In more or less advanced stages, many other countries (United Kingdom, Singapore, China, Russia, the Baltic countries …) are considering the idea of launching a digital or electronic version of their currency. Countries want to launch their own electronic currency in order to retain control over it rather than adopt the new currencies that have been created over the last three years. Issues such as traceability, method of delivery and interest in electronic money need to be addressed in advance.

The World Economic Forum thinks the technology will fundamentally alter the way financial institutions do business around the world. The Bitcoin, whose value is 710 dollars, is too small (11.5 billion dollars), and still too volatile to be able to pretend to play the role of currency of a State. Its annual volatility is 77% against 9% for the Euro-dollar. Bitcoin develops especially in countries in great economic difficulties (Venezuela …). See also www.lesechos.fr/  www.economist.com/   http://uk.businessinsider.com/

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