Sweden’s central bank study into central bank digital currencies (CBDCs) produced mixed results
The Riksbank, Sweden’s central bank, assessed the viability of central bank digital currencies (CBDCs) for the domestic market and published a report with mixed conclusions.
In a 96‑page economic review, the world’s oldest central bank examined four models for implementing a digital version of the Swedish krona, referred to as the “e‑krona.” The review also considered how well each model aligns with the bank’s policy objectives.
The Riksbank’s stated policy objectives include the following:
- Promote a stable store of value and unit of account
- Maintain the ability to act as lender of last resort (LOLR)
- Provide a secure means of payment and settlement
- Support tools that help preserve financial stability
The four implementation models evaluated in the study cover these scenarios:
- A centralized e‑krona system without intermediaries
- A centralized e‑krona with intermediaries
- Decentralized solutions with intermediaries
- A synthetic e‑krona
The assessment noted that while each model has distinct advantages and disadvantages, “some appear better suited to the current needs of the Swedish payments market than others.”
Under the first model, a centralized e‑krona without intermediaries would place full responsibility for the entire CBDC distribution chain on the Riksbank. The review acknowledges that this would represent a substantial shift in the bank’s role, making it more comparable to large retail banks in operational terms.
The second scenario reflects the existing local financial infrastructure more closely by relying on a partnership between the central bank and private service providers. In this setup the Riksbank would remain a prominent wholesale-level participant in the payments market, while private firms would handle the retail distribution. That means the central bank would avoid taking on an operational role in the distribution chain.
If the CBDC were implemented as a decentralized solution with intermediaries, each intermediary involved with the e‑krona would have a direct contractual relationship with end customers. The Riksbank would need contingency plans and safeguards in case one or more intermediaries failed, to protect users and market stability.
The final model considered would grant a broader set of institutions access to the real‑time gross settlement (RTGS) system, and among the four options this one most closely resembles the existing framework. In this design the central bank’s role would be to facilitate settlement within the payments system, while the private sector would provide the secondary layer that serves customers.
Although a synthetic digital version of the krona could be technically viable, the report cautions that such a construct may not meet the definition of a true CBDC, since the central bank’s involvement and the legal and operational characteristics would differ from a native central bank‑issued digital currency.
Overall, the Riksbank’s review highlights trade‑offs between operational control, financial stability, and the existing market structure. It indicates that policymakers must weigh how each model would affect the central bank’s responsibilities, the role of private intermediaries, and the resilience and accessibility of Sweden’s payments system before moving forward.