Sweden has long been on track to becoming one of first countries, if not the first, to be completely cash-free. Now, Sweden’s central bank, the Riksbank, is leading the international charge to develop officially sanctioned cryptocurrencies – and Sweden could be the first country to launch one of its own.
HSBC, one of the largest banking and financial services institutions in the world, calls Sweden’s economy ‘one of the world’s most interesting’, and while the bank says that a Swedish cryptocurrency in 2018 might be a bit too soon, they do think that an ‘e-Krona’ could very well be introduced in the next few years.
Sweden has one of the lowest cash usage rates in the world, with credit and debit cards reigning, and an increasing numbers of shops and other businesses refusing to take cash. Instead, Swedes pay by credit card or via other electronic means, such as Swish, or by receiving an electronic invoice and paying via internet or phone banking. Even public transport has done away with cash payments: you can buy a monthly card or simply order a ticket on your phone and use that. Even more interesting are the increasing reports of beggars and street performers either having portable card terminals or happily letting people Swish them money.
With all this in mind, it should come as no surprise that such an economically and technologically savvy country as Sweden (which is also a country with a strong sense of logic) would look at cryptocurrencies and see not just a business model, but also a new opportunity to simplify markets. HSBC economist James Pomeroy told Nordic Insider that the Swedish central bank ‘has issued a number of research articles on the topic, with the suggestion being that as cash usage continues to dwindle the Riksbank may need to find another way to provide their populations with access to payments that are not via an intermediary such as a retail bank’.
There are two ways the e-Krona could work, according to the Riksbank. One would be more like current cash, with value stored on an app or card, as opposed to a database. A second model would involve e-Krona being stored in accounts on a central database.
While Sweden isn’t the only country to be thinking about cryptocurrencies, it has always been a monetary leader. The Bank of Stockholm was the first to issue modern banknotes, in the 17th century, and in an interesting historical bookend, it may well be in Stockholm that cash first loses its lustre completely.