The coronavirus has caused cash payments in the country to fall to a minimum, so authorities have decided to replace them with digital currency.
The Swedish government is exploring the country’s full transition to digital currency, citing Bloomberg.
The analytical group, which will investigate the implementation of digital currency in Sweden, will be headed by Anna Kinberg Batra, former head of the country’s central bank’s finance committee. Financial Markets Minister Per Bolund said the findings will be presented by the end of November 2022.
Bloomberg writes that Sweden is one of the first countries in the world to consider a full transition to digital currency. The country’s central bank is launching a pilot project with international consultancy Accenture Plc to introduce a blockchain-based electronic krone.
The central bank estimated in October this year that cash use in Sweden had fallen to its lowest level ever. The coronavirus pandemic contributed to this. The bank’s study said that less than 10% of all payments in Sweden are made in cash.
Digital currency is the counterpart to conventional currency, which is issued by the central bank. In fact, it is the electronic counterpart to conventional money. Unlike cryptocurrencies, which exist in decentralised networks, digital currencies are issued and controlled by central banks. Both the former and the latter can use blockchain, though.
According to the World Bank, about 20% of 66 central banks are considering introducing public digital currencies in the next six years.