TL;DR Breakdown
- Swedish banks express concerns over the implementation of E-Krona
- The apex bank of the country however, appears prepared to implement the digital currency
Swedish banks have expressed their concerns on how the proposed E-Krona digital currency would affect their industry.
According to a report from Reuters, the banks have highlighted that moving the country to a digital currency dependent economy would leave them short of funds. This means the banks would have to rely on wholesale markets for their liquidity.
A top executive of SEB, Masih Yazdi, noted that this development would make banks prone to taking up more debt while at the same time make them more susceptible to lack of profit. He added that this could lead to financial instability.
Rickard Eriksson, an adviser of the Swedish Bankers Association, asks if the Central Bank plans to merely hold on to the funds or lend those funds to the banks? According to him, if Riksbank should decide on the latter, it means that banks in Sweden are at the mercy of the central bank as mortgages and other corporate loans would now be based on the terms of the Swedish apex bank.
Sweden Central Bank already calling for implementation of E-Krona
The Central Bank of Sweden appears determined to see to the implementation of the E-Krona. The chief of the bank, Governor Stefan Ingves, was quoted to have advised the government to integrate digital currency into the affairs of the state.
Sweden already ranks as one of the countries in the world that makes use of cash least. And because of that, the Central Bank of the country, Riksbank, has begun to consider taking E-Krona public.
Per Bolund, who is the country’s Financial Market Minister made it known that a Committee of the bank was already reviewing the effects of moving the economy of the country to digital currency totally. It is expected that this review would be completed in 2022.
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