Author Topic: Sweden's Central Bank Governor Lays Out Digital Currency Vision  (Read 3500 times)

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Sweden's Central Bank Governor Lays Out Digital Currency Vision
« on: November 23, 2019, 08:29:36 AM »

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Present also at this event was the Governor of Sweden’s central bank (the Sveriges Riksbank) Stefan Ingves. During a panel discussion, Ingves laid out a six step criteria for the introduction of central bank digital currency.
Before expanding on Sweden’s specific role pertaining to CBDC’s, here is a summary of the six steps in question:


  • Large value and retail payments must be settled in central bank money anywhere around the world – in real time – 24 hours a day
  • Cross currency and cross border payments must also be settled in central bank money under the same conditions
  • A re-definition of what constitutes legal tender in the digital age
  • A digital currency issued directly by the central bank and certified as legal tender
  • Government sponsored digital identification as part of new regulations and a reinforcement of financial inclusion
  • A requirement for physical money and a system to distribute banknotes in the event that the digital network goes down, to be under the control of the central bank


A good starting point for appreciating the significance of Ingves’ vision is to look at the Riksbank’s commentary on digital currency. Exactly one year ago Ingves gave a speech that outlined the central banks’ ‘e-krona‘ project. Since 2017 the Riksbank have been engaged in an extensive research programme on the potential for issuing a digital version of its Krona currency that would eventually supersede physical money.


Ingves confirmed that the bank is building a pilot version of e-krona. There are two possible models for how it could be introduced.
The first is through e-kronas held in an account at the Riksbank, with the second allowing the general public to hold money with the central bank through digital tokens stored on a bank card or mobile app. What the two have in common is that no matter which option was implemented, both would see the public’s money held directly at the Riksbank.


As many readers will already be aware of, physical cash is classified as central bank money. The digital variant of banknotes, for example debit cards, is commercial bank money. Put simply, the private bank you and I hold accounts with have the authority to hold our money electronically and allow us at any time to convert it back into cash e.g. central bank money. Judging by what the Riksbank have said, an e-krona currency could allow individuals to hold electronic money with the central bank, bypassing the traditional commercial banking system.


https://www.zerohedge.com/political/swedens-central-bank-governor-lays-out-digital-currency-vision

 

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