Sweden to test its own e-currency to boost digital payments

Sweden central bank is piloting electronic krona based on blockchain technology

GEDBH9 Stockholm. Image of Stockholm, Sweden during twilight blue hour.

Swedes already use less cash than anyone else in their daily transactions. Now, the central bank is planning a landmark test based on blockchain technology in the hope of introducing an official electronic krona.

The pilot project, which will use distributed ledger technology, is due to run until the end of February 2021, the bank said in a statement on Thursday. The goal is to find a “simple and user-friendly” model, it said.

The development will push Sweden further into the realm of digital payments, and away from coins and notes. The Bank for International Settlements estimated in 2018 that Scandinavia’s biggest economy has the lowest level of cash in circulation, measured as a percentage of GDP.

In the Riksbank’s test, simulated users will get e-krona in a digital wallet, which they can use to make withdrawals, deposits and payments via a mobile application. The test will also incorporate wearable technology, such as smart watches.

The use of cash has dropped rapidly in Sweden, and in a Riksbank survey, the share of people who said they paid in bills and coins for their latest purchase was 13 per cent in 2018, down from 39 per cent at the start of the decade.

The Riksbank is running the project together with Accenture.