Sveriges Riksbank began exploring central bank digital currency (CBDC) in 2016, in response to a decline in cash usage. Cash in circulation as a percentage of GDP has fallen from around 4% in 2004 to around 1%.
Meanwhile, the central bank’s latest survey showed only 13% of total household payments were made in cash. At the time, then-deputy governor Cecilia Skingsley discussed whether the Riksbank should issue electronic payments, as “cash is no longer as easily accessible” in Sweden. In 2017, the renowned e-Krona project, as it has come to be known, was developed as a three-phase action plan.
Phase 3 is currently under way and is the latest stage of Sweden’s central bank’s foray into the realm of digital cash. After three years of research, it has launched the first stage of its CBDC pilot. Working with Accenture, the Riksbank is testing payment, deposit and transfer capabilities for a digital version of the Swedish krona.