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Swedish Central Bank Reveals First Study of Digital Currency

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The digital ambitions of central banks.

Central banks around the world are at varying stages of developing digital currencies.

Credit: Bloomberg

Sweden's central bank released the results of the first phase of a pilot project into what is essentially the most advanced exploration of a post-cash era to be undertaken by a major western economy.

The Riksbank's Mithra Sundberg said it is crucial to determine what the central bank digital currency (CBDC) must do before settling on the technology.

Sundberg said the research team has "looked at the technical possibilities of being able to charge interest."

The pilot project demonstrated the possibility of applying interest rates on a CBDC, whether account- or token-based.

Currently, the Riksbank is concentrating on a two-tier model that would make it responsible for CBDC issuance and redemption. The framework would give participants, like banks or payment firms, direct contact with the end-user.

From Bloomberg
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