Sweden’s central bank, Riksbank, has released a report detailing the third phase of its central bank digital currency (CBDC) investigation. This time, the focus is a collaborative model for retail payments and conditional payments.

The Riksbank began its CBDC research in 2020 with collaboration with existing private payment services as an initial priority. He discussed governance as a key issue for collaboration and divided the options into three levels. The lowest level was a set of guidelines that risked giving participants so much freedom that “it can be difficult for the public to form a common understanding of what an e-krona is.” Also, it may not be developed to serve the entire population.

The other end of the spectrum would be an app operated by Riksbank where “the interface and range of services for e-krona […] be standardized and common to all participants”. He noted that setting those parameters could have a big impact on innovation.

The Riksbank reported a successful test conditional payment related to the purchase of a car. While this was a positive sign for the potential programmability of the electronic currency, it raised privacy concerns due to the additional information that was required to complete the complicated transaction. Besides:

“If you put conditions on money, for example, that it can only be used for certain purchases or on certain occasions, it risks becoming something more like a gift card and therefore not money anymore.”

The Riksbank noted that the transparency inherent in the system could have implications for bank secrecy and could be useful in uncovering misbehavior by service providers.

Related: Cashless: Norway’s Digital Currency Project Raises Privacy Issues

While the Riksbank, like the US Federal Reserve and the European Central Bank, emphasizes that no decision has been made on issuing a CBDC, their discussion had a certain sense of urgency. He wrote:

“When cash takes a backseat in favor of digital services from private players, the Riksbank’s direct role in the payments market is reduced. Therefore, the Riksbank may find it more difficult to fulfill its task of promoting a secure and efficient payment system accessible to all groups in society.”

The e-krona, he suggested, is a possible solution to this problem. The report also touched on the Riksbank’s involvement in the Icebreaker Project involving cross-border retail payments and remittances.

Magazine: Sweden: The death of money?

This post Swedish Riksbank report discusses collaboration with potential e-krona on retail payments

was published first on https://cointelegraph.com/news/swedish-riksbank-report-looks-at-collaboration-with-potential-e-krona-in-retail-payments


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