Sweden revisits digital krona as ECB advances digital euro plans

Sweden’s central bank, the Riksbank, is weighing the potential introduction of a digital krona, as the European Central Bank (ECB) moves forward with its digital euro plans. In a letter to parliament's Finance Committee dated October 7, the Riksbank urged lawmakers to start preparing legislation for a possible central bank digital currency (CBDC), signaling that three years have passed since a government inquiry deemed a digital krona unnecessary.

The letter highlighted the ECB's planned digital euro pilot for 2027 and potential public launch in 2029 as factors prompting Sweden to reconsider its stance. The Riksbank worries that Sweden's payment system could lose competitiveness without a comparable digital version of the nation's currency, and it identifies the use of foreign-currency stablecoins, especially those pegged to the US dollar, as a long-term concern.

However, the bank believes the short-term risk is limited. They estimate that implementing a digital krona would take at least five years, not including legislative changes, and recommend taking legal steps now, regardless of whether Sweden ultimately proceeds with a CBDC.