Sweden revisits digital krona as ECB advances digital euro plans

Sweden’s central bank is revisiting the possibility of introducing a digital krona, citing the European Central Bank’s (ECB) progress toward a digital euro and the growing use of stablecoins as reasons to reconsider a central bank digital currency (CBDC).

In an Oct. 7 letter to parliament’s Finance Committee, published Thursday, the Riksbank urged lawmakers to begin preparing legislation for a potential digital krona, three years after a government inquiry concluded there was insufficient need for one.

The letter pointed to the ECB’s planned digital euro pilot in 2027 and a potential public launch in 2029. According to the Riksbank, Sweden’s payment system could become less competitive without a comparable digital version of its own currency.

The central bank also identified the growing use of foreign-currency stablecoins, particularly those pegged to the US dollar, as a longer-term concern, though it sees the near-term risk as limited.

“If stablecoins pegged to foreign currencies are considered attractive as a means of payment, the use of the Swedish krona could come under pressure even within Sweden’s borders,” the letter read.

The Riksbank estimates that introducing a digital krona would take at least five years, excluding the time required for legislative changes. For this reason, it recommends beginning legal preparations now, even if Sweden ultimately decides against launching a CBDC.