A trial of central bank digital currency in Sweden is to be extended for another year to 2021, in a bid to better understand the benefits and implications of a wider roll-out.
Sweden’s Riksbank central bank has been working on plans for a digital krona in partnership with Accenture, which the bank said was designed to address the problem of the “marginalisation of cash”.
According to the central bank, the CBDC would offer a technical solution to the issue of dwindling cash usage in the country.
“The Riksbank sees potential problems with the marginalisation of cash and has therefore initiated a pilot project to develop a proposal for a technical solution for a central bank digital currency, an e-krona that can work as a complement to cash.”
Recent statements from the bank confirm there are as yet no firm plans on how, or whether, a digital krona would be deployed in the country. The extension to February 2022 is designed to give the bank and other stakeholders a better chance to assess the technology, its benefits and limitations, prior to developing more concrete plans.
“The main aim of the pilot is for the Riksbank to increase its knowledge of a central bank-issued digital krona. The project is now being extended to the end of February 2022. The aim for the coming year is to continue developing the technical solution, with the focus on performance, scalability, testing of off-line functions and bringing external participants into the test environment.”
The move comes at a time of increasing global competition between central banks and governing authorities to develop central bank-backed digital currencies. CBDCs are already being pioneered in countries across the world, with China thought to be the closest of the major global economies to launching its own digital currency.