Sweden’s central bank has urged lawmakers to prepare the legal groundwork for a possible digital krona, reopening a debate that had been set aside after a government inquiry found insufficient need for one three years ago.
In an Oct. 7 letter to parliament’s Finance Committee, the central bank cited the European Central Bank’s digital-euro plans and the growing use of foreign-currency stablecoins. It said Sweden’s payment system could become less competitive if the euro area introduces a digital currency without a comparable digital form of the krona.
The Swedish central bank also identified dollar-pegged stablecoins as a longer-term concern. It said the immediate risk to Sweden’s payment system is limited, but warned that wider use of foreign-currency stablecoins could put pressure on the krona’s role even inside Sweden.
The recommendation does not amount to a decision to launch a digital krona. The central bank estimates that implementation would take at least five years, excluding the time required to amend legislation, which is why it wants legal preparations to begin now even if parliament ultimately rejects the project.