Already cash-averse, Sweden is trying out the digital e-krona
The central bank’s pilot project will use ‘distributed ledger technology’ based on blockchain platform Corda
Stockholm — 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 back 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 notes and coins for their latest purchase was 13% in 2018, down from 39% at the start of the decade.
The technology is based on the US-based company R3’s blockchain platform, Corda. According to the Riksbank, Corda has important differences from crypto-currencies, which enable the creation of a private network that is only accessible for participants approved by the central bank.