Sweden could be the first economy to introduce its own cryptocurrency — and it will be called the e-krona

Sweden fans
Swedish soccer fan paints the face of an other fan in the colours
of the national flag in Cologne

Reuters/Fabrizio Bensch

  • Sweden’s central bank, the Riksbank, could become the
    first to introduce its own cryptocurrency.
  • Cash usage in the Scandinavian nation is dropping
    rapidly, making Sweden a prime candidate for an “official”
  • The introduction of the e-krona could come within a
    couple of years, although “2018 may be a little too soon,”
    according to HSBC’s James Pomeroy.

Sweden’s central bank, the Riksbank, is spearheading
international cooperation on the development of officially
sanctioned cryptocurrencies and could be the first to launch its
own, according to a note from analysts at HSBC.

HSBC economist James Pomeroy sent a note to clients this week
titled “Sweden’s big year: Can the economy overcome some

Broadly, the note takes a look at the state of Sweden’s economy —
which HSBC calls “one of the world’s most interesting” — before
drilling down to the possible introduction of a so-called
“e-krona,” something that might occur within the next couple of
years, although “2018 may be a little too soon.”

Sweden’s economy has one of the lowest cash usage rates of
anywhere in the world, with cash use often actively discouraged
by shops and other businesses. There are even anecdotal tales of
beggars and buskers having card terminals to take payments on the

The chart below shows just how rapidly cash use in Sweden is
dwindling:Sweden cash useHSBC

As such, it makes sense that the Riksbank is at the forefront of
discussions of what a central bank issued cryptocurrency could
look like.

As HSBC economist James Pomeroy notes, the Riksbank has “issued a
number of research articles on the topic, with the suggestion
being that as cash usage continues to dwindle, the central bank
may need to find another way to provide their populations with
access to payments that are not via an intermediary such as a
retail bank.”

“The so-called e-Krona will have to be able to be used for small
purchases, as a claim on the Riksbank and be accessible by
companies, individuals and financial institutions at all times.”

Interestingly, the Riksbank has been at the forefront of advances
in money throughout history, with HSBC flagging a speech by the
bank’s governor, Stefan Ingves, in December,
when Ingves pointed out that
: “It was in Stockholm that the
first modern banknote was created more than 350 years ago, and
that it is here, in Sweden, that cash is currently taking its
last breaths. Perhaps the Riksbank will be writing history

The Riksbank has
presented two possible ways that the e-krona could work
, one
based on value and another on a register-based system.

The first option, HSBC says “would be more like cash is at
present, with value stored on an app or a card rather than in a
central database.”

Alternatively, under the register-based system, e-krona would be
stored in accounts that themselves would be held on a central

“This is more complex, but may make the framework easier to
expand and develop over time, and would likely require the use of
blockchain technology,” Pomeroy writes. The Riksbank has also
said that it would consider using a mixture of the two

“A Central Bank Cryptocurrency (CBCC) would use blockchain
technology, whereas a non-blockchain solution would make the
e-Krona a ‘deposited currency account’,” Pomeroy adds.

The chart below shows where the two options would fit into the
global monetary system as it is right now:While it might become
the first central bank to introduce a cryptocurrency, the
Riksbank is by no means the only one thinking about
it.Money flower cryptocurrenciesHSBC

For instance, over the Christmas period, the Bank of England made
numerous headlines after it was suggested that it could be
planning to introduce a cryptocurrency this year.

There is no official word that the BoE has such plans, but a
told the Daily Telegraph that a crypto research unit within the
bank set up in 2015 could report its findings at some point in
That does not mean, however, that the bank is anywhere
near formally introducing such a currency.



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