Sweden's central bank governor has called for a renewed investigation into launching a national digital currency. Riksbank Governor Erik Thedéen told a parliamentary committee hearing that the time is right to re-examine the e-krona project. His statement signals a potential acceleration in Sweden's journey toward a state-backed digital currency.
"The digital euro has quite strong momentum now and we believe, or many say they believe, it could be introduced by 2029," Thedéen said during the hearing at the Riksdag. "They have come quite far with the legislative work." This European progress creates new urgency for Swedish policymakers. Thedéen's intervention places the issue firmly back on the government's agenda in Rosenbad.
The Governor's Case for Renewed Scrutiny
Governor Thedéen's argument hinges on strategic alignment and financial sovereignty. He emphasized that Sweden cannot afford to be a passive observer while the European Central Bank advances its digital euro project. A coordinated approach with European partners is now essential. The Riksbank must assess whether a standalone e-krona remains viable or if Sweden should fully integrate with the ECB's system.
"It is time to again investigate whether Sweden should have an e-krona," Thedéen stated definitively. His testimony before the Riksdag's Finance Committee carries significant weight. Central bank governors typically avoid making explicit policy demands without careful consideration. This move suggests the Riksbank's internal analysis points toward concrete next steps.
Sweden's Pioneering Path and the Cashless Reality
Sweden has been a global pioneer in exploring central bank digital currencies. The Riksbank initiated its e-krona project in 2017, long before most other nations. This early start was driven by an undeniable domestic trend: the rapid disappearance of cash. Today, cash accounts for less than 10% of transaction value at Swedish points of sale.
This decline creates a fundamental problem for monetary sovereignty. If the public only uses private digital money, the central bank's role as a provider of safe, public currency erodes. The e-krona is designed to be a digital complement to physical cash, not a replacement. It would be a state-guaranteed claim on the Riksbank, available to everyone for everyday payments.
The European Dimension and the 2029 Timeline
The European Central Bank's work is the most critical external factor. The ECB entered its "preparation phase" for a digital euro in October 2023. This phase involves finalizing rules, selecting technology providers, and conducting further testing. The stated goal is to potentially launch a digital euro around 2029, a timeline Thedéen referenced directly.
This creates a complex decision matrix for Swedish authorities. Should Sweden develop its own, technically compatible e-krona? Should it wait and adopt the digital euro? Or is a two-tier model, with an e-krona for domestic use and the digital euro for cross-border transactions, feasible? These questions require a formal government investigation.
Technological Foundations and Pilot Lessons
The Riksbank is not starting from zero. Its e-krona pilot projects have tested solutions based on distributed ledger technology (DLT), similar to blockchain but controlled by the central bank. These tests have examined offline functionality, programmability for smart contracts, and integration with existing banking infrastructure. The technical feasibility is increasingly proven.
A 2022 Riksbank study found that a majority of Swedes were open to using a digital currency. Public trust is a crucial asset. However, significant challenges remain. Privacy concerns are paramount; citizens will not accept a tool for state surveillance. Cybersecurity is another major hurdle, as a digital currency would be a prime target for attacks.
The Banking Sector's Balancing Act
A key debate centers on the e-krona's potential impact on commercial banks. If citizens can hold digital money directly with the Riksbank, will they withdraw deposits from traditional banks? This could weaken bank funding and their ability to lend. The Riksbank has proposed design features to mitigate this, such as holding limits or tiered remuneration.
"The design is everything," said Anna Larsson, a financial technology analyst based in Stockholm. "A well-designed e-krona can strengthen the payment system without destabilizing banks. A poorly designed one could have unintended consequences. The investigation must get this balance right." The Swedish Bankers' Association is likely to engage deeply in any formal inquiry.
The Road Ahead: From Riksbank to Government
Governor Thedéen's statement is a powerful opening move, but the next steps belong to the political sphere. The Riksbank can recommend and prepare, but only the Swedish government can commission a formal official investigation. A decision from the Ministry of Finance, housed in Rosenbad, is required to launch the process.
Such an investigation would likely examine legal amendments, economic impact, technical architecture, and alignment with EU law. It would involve consultations with banks, payment firms, consumer groups, and data protection authorities. The findings would form the basis for a Riksdag decision, possibly requiring new legislation.
A Strategic Choice for Swedish Sovereignty
Ultimately, the e-krona question transcends technology. It is about the future shape of the monetary system in a digital age. For a country with a proud history of financial innovation and stability, the choice carries weight. Will Sweden maintain its own digital currency infrastructure, or will it cede this domain to a European solution?
Thedéen's call to action frames this as a timely, necessary decision. With the digital euro advancing, Sweden's window for defining its own path is narrowing. The government's response will signal whether Sweden aims to lead the next wave of monetary innovation or follow a template set in Frankfurt. The coming months will reveal if policymakers in Stockholm are prepared to make one of the most significant financial decisions of the decade.