The Swedish central bank Riksbank has indicated that it wishes to investigate how ‘e-krona,’ the proposed digital currency of Sweden, may encourage smart payments. In a study released on Wednesday, the Riksbank shared information about successful experiments to merge state-backed digital money/central bank digital currency (CBDC), with the traditional banking systems. It also informed that it was still investigating claims of the promised benefits of the digital currency.
The study of the central bank highlights the various advantages of CBDCs such as programmable transfers, triggering of the payment on completion of a project, and issuing pocket money that cannot be consumed on sweets. The report also mentions that Swedish officials want to investigate these promised advantages of digital currency further.
The central bank informed in the report that although no decision has been made on the design or issuance of an e-krona, as a way forward for the next phase it wishes to study and investigate how such solutions may be utilised to develop new payment services. It also wants to find out the reasons why such solutions will be more effective than traditional technology.
The research also successfully experimented to integrate current intermediaries such as banks to distribute CBDCs to average individuals, as well as offline payment options in which the asset may be held locally on someone’s phone.
Sweden is a member of the European Union (EU). Just like the European Central Bank (ECB) for the EU, Sweden is also considering whether to allow offline payments using digital currencies. Granting permission for these offline payments might improve privacy but carries disadvantages of cash, like theft or the use of money for illegal reasons.
