Digital euro could reopen e-krona debate for Riksbank – Bunge

The digital euro project may reopen the debate about whether Sweden should introduce its own central bank digital currency (CBDC), the Sveriges Riksbank’s first deputy governor has said.

In a speech on December 4, Aino Bunge said that although a public inquiry in 2023 concluded “there was not a strong enough societal need” for a Swedish CBDC, “this could change” if the European Central Bank went ahead with the digital euro.

She added that the Riksbank continued to work closely with the ECB on both the regulations and the technical framework surrounding the digital euro. Both institutions, she said, were focusing closely on making the Eurosystem’s CBDC platform compatible with “different currencies and transactions between them”.

“One way to view the ECB’s digital euro development activities is that many countries – and many countries’ central banks – are coming together to build a common system,” Bunge said. She added that such a solution would reduce both the risks and the costs for central banks looking to introduce a CBDC.

If the European Parliament passes a law allowing the ECB to issue a digital euro – which the central bank hopes the legislature will do by mid-2026 – the Riksbank will “start discussing how to approach the issue of an e-krona”, the first deputy governor said.

She also touched on the topic of Sweden moving to the Eurosystem’s T2 real-time gross settlement system, alongside moving securities settlement to the ECB’s T2S.

“We aim to complete the move to T2 in 2030,” Bunge said. She added that Sweden’s central bank would also start preparing the transition to T2S in 2026, and that both the “Riksbank and the market consider it inappropriate to move both settlement services at the same time”.