The Riksbank, the central bank of Sweden, has advocated for bolstering the nation’s cash usage and being ready for the possible adoption of a digital central bank currency. The announcement from Riksbank coincides with a sharp decline in the use of cash in Sweden; a 2022 study found that just 8% of Swedes used cash for their most recent in-person purchase. This represents a reduction from 33% ten years ago.
Policymakers are thinking about the necessity to protect cash transactions and investigating the idea of a digital central bank currency as a result of the sharp drop in the use of cash. Earlier this year, a government-appointed investigation advised making sure that some products, such as prescription medications, may be purchased with cash. The investigation did not, however, turn up sufficient evidence to support laws mandating that food stores and petrol stations only take cash payments.
In response, the Riksbank contended that as cash would initially be the only practical form of payment in the event of a power and telecommunications loss, the requirement to accept cash should be expanded to include food, fuel, and a larger variety of pharmacy supplies. The investigation was also criticised by the central bank for failing to suggest any legal modifications required in order to issue the e-krona, a digital currency.
In order to ensure that Sweden can swiftly follow the lead of the European Central Bank in the event that it introduces a digital common currency, the Riksbank underlined the necessity of initiating legislative work quickly in order to get ready for the introduction of a digital currency. “We have to get ready for the future,” Governor Erik Thedeen of Riksbank stated. “Given the ongoing work on a digital euro, an e-krona might be part of the future payment market.”