Now There Are Plans for ‘e-Krona’ in Cash-Shy Sweden

(Bloomberg) -- Sweden’s central bank will next year seek to start a pilot project to develop an electronic currency as the Nordic nation grapples with how to secure payment systems in a future without cash.

The aim will be “to develop a tested and ready e‐krona” that could be introduced should the bank “wish to do so,” it said in a second report of its electronic currency review. “The initial focus will be on an e‐krona that constitutes a prepaid value (electronic money) without interest and with traceable transactions.”

The pilot project that could start next year will investigate how to create an e-krona that can be loaded on to an app or a card to be used for payments. The bank will also examine what legal changes would be needed to eventually introduce an e-krona that is also connected to an account at the central bank.

“Today we offer e-money to banks, but we’re not supposed to offer accounts to citizens, so parliament will need to make a decision on whether to allow this,” said Monika Johansson, a lawyer and adviser at the Riksbank payments department.

Sweden is becoming increasingly cashless. Credit and debit cards are now by far the most common mode of payment while mobile payments have become as common as cash. A parliament committee has proposed that the largest banks should be forced to handle cash in an effort to halt the development. This year, only 13 percent of Swedes paid for their most recent purchase in cash, down from 39 percent in 2010.

Sweden may “in a few years’ time be in a position where cash is no longer generally accepted by households and retailers,” according to the report.

The Riksbank board will now need to approve the project.

An e-krona could be helpful for tourists in Sweden who could load money onto a locally issued card. Older people or the visually impaired could also be helped by having cards with smaller amounts as a replacement for cash payments.

“We begin to look at the value-based e-krona and try to make it as good as possible,” Johansson said. We can “then potentially connect it to an account-based e-krona in the future if government, parliament and the Riksbank think it’s a good idea.”

To contact the reporter on this story: Amanda Billner in Stockholm at abillner@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net

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