First National Bank Mulls Issuing Electronic Money

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Written By Hossein Soltani

Sweden is the first country to consider issuing an official electronic currency, says the national bank.

The Riksbank wants to start moving the economy over to the ekrona within two years, according to an official statement.

The move was prompted by a steady decline in the use of bank notes and coins in favour of card and online transactions in Sweden during recent years.

Deputy governor Cecilia Skingsley suggested the ekrona should complement traditional currency rather than replace notes and change in the pocket and purses.

“Almost everyone has access to the internet via computers, smartphones and tablets and the conditions are good for launching more electronic forms of payment,” said Skingsley.

No decision yet

“If the market can make use of the new technology to launch new and popular payment services, why shouldn’t the Riksbank be able to do the same?”

The Riksbank was quick to explain that no decision to issue an electronic currency had been made.

A spokesman pointed out that a significant number of legal, ethical and technical problems needed addressing and that the Riksbank was the first to go down this route.

Although the Riksbank is the first central bank to consider an official electronic currency, virtual currencies such as Bitcoin and ethereum are rising in popularity online.

However, no virtual currencies have the stamp of approval of a central bank, and because of this have no regulation or official exchange rates.

Decline in cash transactions

This has left many virtual currencies open to crooks who have hacked exchanges.

From a legal viewpoint, official recognition of an online currency means trading is exempt from taxes.

“The declining use of cash in Sweden means that this is more of a burning issue for us than for most other central banks. Although it may appear simple at first glance to issue ekrona, this is something entirely new for a central bank and there is no precedent to follow,” said Skingsley.

“If the Riksbank chooses to issue ekrona, it is not to replace cash. The Riksbank will continue issuing banknotes and coins if there is demand for them in society. It is our statutory duty and we will of course continue to live up to it.”