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The inclusive e-krona – not as cryptic as it sounds

Can a national digital currency create a more inclusive society?

Kim Engman

Senior Director, Payments Strategy & Business Development

These days, most adults in Sweden will struggle to conjure up an answer as to whose portrait adorns the 20-SEK bill. Truth be told, the closest a Swede ever gets to cash in 2022 is when they frantically search the bottom of their purses for a golden coin to put under their child’s pillow after lengthy chats about the tooth fairy. With that seeming detachment to cash, it’s no wonder the Swedish central bank, Riksbanken, decided to investigate the possibilities of a national digital currency.

The use of banknotes and coins is declining in society. At the same time, technological advances with regard to electronic money and payment methods are proceeding rapidly. Sweden is currently one of the countries where digital payments are increasing the fastest.” - Riksbanken, on the subject of e-krona

Citing the diminishing use of cash (9% of retail payments), Riksbanken has since 2019 been conducting a CBDC-pilot, or Central Bank Digital Currency-pilot with the aim of “investigating whether it is possible to issue a digital complement to cash, a so-called e-krona". The currently hypothetical currency, e-krona, would have the same value as a krona in someone’s bank account as well as a physical one-krona coin. This would allow Riksbanken to offer the citizens access to state-issued money in a digital form. Presently, Riksbanken is only allowed to offer digital money to participants in the RIX Payment System, which includes banks and other services and organizations.

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Helping Riksbanken fulfill their mission

In order to make sure Sweden keeps up with the current times, Riksbanken has made it their mission to investigate if households, companies, private citizens, and everyone else may be able to continue making safe and efficient payments in central bank money, even in a digital format. Establishing a supporting infrastructure is easier said than done ­– but not impossible. Being a key provider of solutions and infrastructure to the financial services industry, including commercial- and central banks, we’re delighted to be a part of this pilot and explore how the existing retail payment infrastructure might interact with an e-krona platform and network.

Our cooperation with the Swedish central bank on their e-krona pilot is but one example of our continuing and ever-increasing focus on the future of payments and money. To us, the e-krona project is truly special; not only because we realize the importance of a resilient and efficient alternative to cash, but also the positive effect an e-krona will have on people’s everyday lives and for the society as a whole.” - Kim Engman, Senior Director at Tietoevry Banking

Be inclusive, or go home

Glancing overseas, The Monetary Authority of Singapore has, under the guidance of Safety, Sustainability, and Inclusiveness, laid out 12 problem statements to be addressed to ensure a successful design and technical application of a CBDC. The optimal solution for each statement may differ between countries and currency areas.

If these are successfully solved, citizens and businesses alike stand to be offered a CBDC that may enable direct to public payments in times of crisis, enhance data security and privacy, and foster innovation, just to mention a few of the perks.

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A Central Bank Digital Currency, like the potential e-krona, is a way for Riksbanken to adapt to the increasingly digital world we live in. At the same time, it ensures that people who have previously relied heavily on cash are given a higher chance of being included in our society, a society that increasingly says “No cash, card only”.

Given a thoughtful design, a CBDC may provide central banks and citizens alike with more control, increase inclusiveness and provide a society with a resilient and environmentally efficient digital version of central bank money to supplement cash. The chosen design and technology are key to a successful implementation. As luck would have it, being developers of digital futures, this is what we do best; carefully and creating purposeful technology that changes the world for good.


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