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Sweden to test digital currency

Central Bank-issued Digital Currencies (CBDCs) have become very popular amongst governments in the past few months. This especially sprung after Facebook announced its new venture, Project Libra.

In fact, in mid-April 2020 the governors of the European Central Bank (ECB), Bank of Japan and central banks of the United Kingdom, Canada, Sweden and Switzerland will all meet in Washington at an International Monetary Fund (IMF) conference.

Sweden Central Bank, Sveriges Riksbankannounced earlier that they will be testing the “e-krona” which will be based on digital ledger technology (DLT). The new blockchain-based digital currency will be part of a pilot program that will last until February 2021, with the possibility of further extension if required.

The new form of this currency shall be “simple, user-friendly as well as fulfil critical requirements for security and performance”. Similar to current forms of digital assets such as Bitcoin and Ether, the user will be able to hold the e-krona in a digital wallet where they can spend, deposit and withdraw from a mobile app. Additionally, Sweden’s Central Bank added: “the user shall also be able to make payments via wearables, such as smart watches, and cards”.

The emergence of CBDCs is by no means a surprise and was part of the natural evolution of money. These new currencies are simply the newer form of fiat currencies and not digital assets like Bitcoin. It will be interesting to see how certain problems currently faced by the crypto-community will be solved. The first of which is the loss of private keys.

Image Licensed via Pixabay

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