Riksbank Reopens E-Krona Debate as Cash Use Falls Further

Sweden’s central bank has revived the debate over whether the country should introduce an e-krona, as declining cash usage, the development of a digital euro and the growth of stablecoins raise fresh questions about the future role of sovereign money.

Riksbank Reopens E-Krona Debate

The Riksbank began exploring a retail central bank digital currency almost a decade ago, driven by Sweden’s rapid shift away from cash. After years of technical work, however, a government inquiry in 2023 concluded there was no urgent need to launch an e-krona.

That assessment is now being reconsidered.

Deputy governor Per Jansson has warned that Sweden risks falling behind if the krona is not available in a convenient digital form as other forms of digital money become more widely used.

Cash Is Already Becoming Marginal

The concern is particularly acute because Sweden is one of Europe’s most cash-light economies.

A Riksbank survey this year found that only 5% of Swedes used cash for their most recent purchase.

That matters because cash remains the public’s direct claim on the central bank. If physical cash continues to disappear from everyday use, policymakers face the question of whether a digital equivalent is needed to preserve access to state-backed money.

Jansson argued that if Swedish kronor are not available in a usable digital form, consumers could increasingly turn to other payment instruments that are easier to use across borders.

Stablecoins and the Digital Euro Add New Pressure

The debate is no longer being driven solely by declining cash use.

Stablecoins are gaining traction internationally, while the European Central Bank is working towards a potential digital euro launch in 2029.

If alternative digital currencies became widely used in Sweden, the Riksbank fears the krona’s role could weaken.

That could ultimately complicate the transmission of monetary policy and create new financial stability risks.

The central bank has not formally endorsed an e-krona, and any decision would remain with parliament.

Payments Resilience Becomes Part of the Argument

Geopolitical risk is adding another dimension.

Sweden has increasingly treated payments infrastructure as part of its wider resilience and defence strategy, particularly amid concerns about cyber attacks, electricity outages and disruption to critical infrastructure.

That strengthens the argument for ensuring that households and businesses retain access to robust domestic payment options.

The difficulty is timing. Jansson estimates that legislation, infrastructure and implementation would take at least five years.

The e-krona debate is therefore shifting from whether Sweden needs a CBDC today to whether it can afford to wait until competing forms of digital money are already firmly established.