Banknote circulation drops by nearly 40%, Swedish central bank considers issuing digital currency

Sweden’s central bank is now considering the possibility of issuing its own digital currency, but it has not yet decided which technology to use.

According to the Financial Times, Sweden’s central bank, the Riksbank, says it is under pressure to transition as cash usage declines in the country (paper banknotes in circulation have reportedly fallen by nearly 40% since 2009).

Cecilia Skingsley, deputy governor of the Swedish central bank, said the bank is currently weighing various technologies. Although she did not mention blockchain technology specifically, the Financial Times pointed out that this technology should be considered by the central bank.

Skingsley said:

“That’s where our responsibility comes in, because the public sector shouldn’t be a bystander and watch the private sector take away individual funds from the central bank.”

Notably, Skingsley said the digital currency could be issued alongside banknotes and coins, though the Riksbank does not want to promote illegal activity through such issuance.

Skingsley is expected to further elaborate on the idea of ​​issuing a digital currency in a speech in the near future.

Sweden has become the latest country to consider issuing a digital currency, a process that most will at least include exploring blockchain-based digital currencies.

In recent months, the Bank of England has publicly discussed and explored issuing a digital currency using blockchain technology, while the People’s Bank of China is also reportedly investigating the idea of ​​issuing a digital currency.