The Riksbank, Sweden’s central bank, recently released a report detailing the findings of its third round of experiments with its state stablecoin.
The report primarily focused on the governance and programmability of the digital currency.
Riksbank’s researchers emphasized that the digital krone must utilize distributed ledger technology (DLT) to enable programmability, which is necessary for it to be used for payments and settlements.
There are various design options available for a managed digital Swedish krona, each with its own set of advantages and disadvantages.
While CBDCs with minimal governance would encourage competition among financial system participants, implementing them on a large scale would pose a challenge.
On the other hand, a heavily-governed digital krone would allow for standard services to be provided to the public, but could limit innovation and competition.
To strike a sustainable balance between the general tasks of the state stablecoin and the needs of the public, the Swedish Central Bank plans to engage in detailed discussions with payment market participants who may use it in the future.
The Bank for International Settlements (BIS) also took part in the third stage of CBDC testing, which was carried out as part of the Icebreaker project, during which Riksbank collaborated with the central banks of Israel and Norway.
The Swedish Central Bank is exploring the possibility of launching its own digital currency from 2020 by conducting pilot projects based on the R3 Corda blockchain.
However, the regulator has yet to confirm whether it will eventually launch the digital krona.
Riksbank’s top manager, Mithra Sunberg, recently stated that the government will not monitor digital krone users or control how they spend their money.