Sweden’s Central Bank May Have a Digital Currency in 5 Years
(Bloomberg) -- Riksbank Governor Stefan Ingves said Sweden could have a digital central-bank currency within five years, as the concept of money looks set to enter a new post-cash era.
The estimate marks the first time Ingves has offered a clear timeline.
The Riksbank remains at the forefront among major western central banks in exploring how to respond to an increasingly cashless world, as notes and coins head for virtual extinction in Sweden.
Five years “is a reasonable target,” Ingves told reports in Stockholm on Thursday. He’s previously noted that the final decision needs to be taken by parliament.
A digital currency already exists in the Bahamas, and China is currently piloting a digital yuan in several cities. European Central Bank President Christine Lagarde said in February a digital euro might be a reality in about four years.
Sweden’s central bank, the world’s oldest, has kept pushing back its timeline. After once suggesting it might be ready to move ahead with an e-krona by 2018, the Riksbank recently acknowledged the current pilot project won’t be completed until early next year, and has even given itself room to continue trying until the end of 2026.
Ingves said the speed of the e-krona investigation is a “success” for Sweden. Still, “we’ll only know in hindsight whether it was quick or slow,” he said.
Central bank digital currencies have been linked to the discussion about the developed nations running out of monetary tools from interest rates to quantitative easing. While Ingves has earlier highlighted the need to embrace more unorthodox tools in future, Deputy Governor Anna Breman noted in February that an e-krona could make it easier to introduce “helicopter money” as well as deeply negative interest rates.
Using a digital currency for new monetary policy tools is not currently an issue, Ingves said on Thursday, adding “that would be a question for the distant future.”
Sweden’s government is due to publish its own inquiry into an e-krona in November 2022.
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