Banknotes and coins are now a rare sight in Sweden and may soon be permanently abolished: the country’s government announced on Friday that it would consider the viability of a plan for a full transition to digital currency.
The evaluation of the proposal will be completed by November 2022, Finance Minister Per Baud said according to Bloomberg quoted. The study will be led by Anna Kinberg Batra, former chair of the finance committee at the Riksbank – Sweden’s central bank.
The digital currency is already being developed by Riksbank in collaboration with financial services company Accenture. The “electronic crown”, or e-krona, takes advantage of the blockchain technology on which the Bitcoin cryptocurrency is based.
In a blockchain, all transactions are stored in lists linked to each other by encryption, so that it is impossible to retroactively modify the entries.
“The digital payments market must be secure and accessible for everyone,” the minister for financial markets said.
“Depending on the design of the digital currency and the technologies used, it can have serious consequences for the entire economic system,” he said.
According to the Riksbank, cash use in Sweden fell to a new historic low in October, as the pandemic encourages online transactions.
Banknotes and coins are now used in less than 10% of payments, and most bank branches do not accept cash transactions.