The growing popularity of Bitcoin and its benefits has got the central banks across the world considering the pros and cons of implementing a digital version of their respective fiat currencies. None of the countries have so far come up with a solid plan, except for Sweden. The National Bank of Sweden — Sveriges Riksbank has earlier today announced its intention to launch Ekron, a digital currency as the country’s legal tender in the next two years.
The plans to launch the digital currency was announced by the Deputy Governor of Sweden’s National Bank, Cecilia Skingsleyova. According to reports, the country’s decision to switch from banknotes to digital currency is influenced by a dramatic drop in the use of currency notes among the Swedish population. A financial news publication has reported that the country has seen a 40 percent drop in the usage of coins and bank notes since 2009.
If Sveriges Riksbank does successfully implement the use of fiat linked cryptocurrency, it will be making history yet again. The very bank was responsible for introducing the first paper currency way back in the 1660’s. However, it is not an easy task ahead for the central bank as there are various aspects that need to be considered before they can completely do away with bank notes. Among various issues, the bank will also consider the impact of digital currency on the country’s existing monetary policy and financial stability.
The top executive of Sweden’s National Bank also mentions that the plan is still in its infancy and as they explore various options, questions regarding traceability of funds, delivery method and interest structure for the digital money has to be addressed as well. Also, Ekron may not completely replace physical currency notes and coins . Instead, it may operate alongside conventional currency, at least until other countries come up with similar currencies.
Earlier last year, Ecuador introduced a digital version of dollars, with limited success. Other countries working on the implementation of digital versions of fiat currency includes China and South Korea.
Ref: Openiazoch | Image: My International Adventure