The central bank of Sweden, Sveriges Riksbank officially launches its e-Krona, the world’s second digital currency backed by a central bank.
Before the official lunch of the e-Krona, the digital currency has been available on a trail basis with external clients on the official website created by the Swedish government.
Swedish citizens were permitted to “buy and sell within the country or in stores abroad”.
After the announcement by the Swedish central bank, the ‘e-Krona’ can be safely purchased on the official website provided by the authorities.
The price of the Swedish central bank digital currency was one e-Krona for $0.000094, at the time of the official announcement.
Meanwhile, it has been made crystal, by Swedish bank Riksbank that the eKrona is not a cryptocurrency like Bitcoin and others that exist on the market.
Although it uses blockchain technology, its function is primarily to replace the physical bills or coins that exist in the country, the central bank disclosed.
“Just like cash, the e-Krona would be issued by the Riksbank and be available to the general public.”Sveriges Riksbank
The Riksbank last year announced the possibility of issuing a “digital complement to cash”, given that “the use of banknotes and coins is decreasing in society”.
In addition to this development, “technological advances with regard to electronic money and payment methods proceeded rapidly”, the Bank disclosed.
The Sveriges Riksbank had since 2017 conducted numerous investigations on the dynamics of the central bank digital currency (CBDC).
In the same vein, the European Central Bank has also been “conducting studies on the creation of a state cryptocurrency and has recently announced the launch of the digital euro project”.
Although Sweden is part of the European Union (EU) as a member state, it does not accept the euro as its official currency and retains its own currency, the Swedish krona.
Digital currency revolution
In the meantime, the launch of the eKrona comes next to the Barbados launch of its CBDC, the ‘Sand dollar’ in May last year.
However, the e-Krona happens to be the “first digital currency to hit the market with the backing of a major economy”, and it is competing directly with cryptocurrencies.
Also, about 80% of central banks around the world are also conducting pilot tests.
Numerous central bank digital currency projects are also underway in other major economies like Russia, Japan, and the United States, which is deciding how to respond to China’s digital yuan project that is at an advanced stage.
Meanwhile “Sweden is currently one of the countries where digital payments are increasing faster”, the central bank disclosed.
The total amount of banknotes and coins in circulation has declined to less than 1.4% in the economy, according to estimates by the Swedish central bank.
The cash shortage, the convenience of electronic payments, and the pandemic accelerated this abrupt decline in physical cash, Sveriges Riksbank disclosed.
The door is being opened to digital money controlled by central banks and countries, as “more coins minted by issuing bodies are expected to continue to appear on the global cryptographic slate this year”, experts disclose.