Sweden’s central bank revives e-krona debate as stablecoins and digital euro loom

• Sweden’s central bank warns foreign stablecoins and a digital euro risk eroding krona demand.
• The Riksbank sees an e-krona as critical to securing national payments and monetary control.
• Lawmakers have yet to approve the e-krona, which would take at least five years to launch.

Sweden’s central bank is calling for lawmakers to reconsider a digital krona, warning that foreign-currency stablecoins and a planned digital euro could erode the currency’s role in payments.

An e-krona would give the public access to central bank money in digital form. A 2023 government inquiry found too little need for one, but the Riksbank says changes in how people pay and growing security risks may warrant a new review.

“If our cash becomes digital and Swedish kronor are not available in a usable digital form, then the krona may not be able to compete with other, more convenient digital payment instruments that can easily be used across borders,” Deputy Governor Per Jansson told Reuters on the sidelines of a conference.

The Riksbank hasn’t taken a position on issuing one, but wants lawmakers to start preparing legislation now, since the work would take at least five years.

The central bank warned that stablecoins tied to foreign currencies could reduce demand for the krona in a recent letter. It sees little near-term risk but says the long-term threat remains.