Do you know who is decorating the current twenty kronor banknote? Astrid Lindgren or Selma Lagerlöf? Most of today’s wallets do not even fit a couple of banknotes, and at some places, the option of paying with cash is not even available anymore. Why struggle with counting banknotes and coins when it is so easy to use a credit card or Swish? It is smoother and more practical. As a matter of fact, according to Riksbanken, only 50 per cent of the Swedish population have paid with cash in the last month, which is a vast decrease compared with 93 per cent in 2012. Sweden is becoming a cashless society. This might sound modern and good, but it is important to not forget the benefits cash entails and that it can be crucial in an economic crisis. The Riksbank is currently working to solve this dilemma, and the solution might be the E-krona.
Well, what is the E-krona then?
The E-krona is a digital krona that is equivalent to cash, and that is solely emitted by the Swedish central bank, the Riksbank. The Riksbank deems that a solution like this is necessary since the security of cash is jeopardized when the quantity of cash in the society reduces. As of right now, most of the money in circulation is handed out from private banks, and they do not have all the money backed up in their reserves. In a financial crisis, the risk of banks defaulting is high. Therefore, a cashless society is not safe since the risk of profound damage to the national economy increases. Cash, on the other hand, is tangible and stable and allows people to hold money for saving purposes without risk for default.
In 2017, the Riksbank started the E-krona project. Its purpose is to increase the security in the payment system and adapt cash to technological development. The project is still in the making, and no official decision has been made about the E-krona’s enforcement. There is still many technical and legal aspect to sort out. One discussion that has been brought up in this context is the accessibility of the E-krona. Social groups such as the elderly and some disabled people are especially vulnerable to be excluded from the usage of the E-krona, because of its requirements for technical knowledge. In addition, the increased risk of a cyber-attacks has also been thoroughly discussed.
The implementation of the E-krona could be regarded as a necessary step in the digitalization of our society. As other revolutionizing solutions have popped up in the Fin-Tech industry, for example, Swish and Klarna, it would not be surprising to soon see the E-krona in action. One thing is safe to say, it will be interesting to follow the E-krona’s development in the future. Who knows, maybe Astrid Lindgren will be the last face of the twenty kronor banknote, sooner than we expected.