The Central Bank of Sweden has issued a new report on the e-krona project, a pilot program which would create a digital version of the Swedish fiat currency. The economic review published by the Sveriges Riksbank on a quarterly basis is usually centered on a theme; the latest version delves into the e-krona project and what central bank officials think about the prospect of other fiat currencies being converted to digital tokens.
Technology think tank Accenture has been advising the Swedish government on the e-krona development since December of last year. The latest report on the status of the project includes a section devoted to blockchain management. Central bank officials are not fully convinced on the ability of a peer-to-peer network to maintain security. With blockchain being mentioned just once in a report that is nearly 100 pages long, financial technology analysts believe that Sweden may consider the possibility of developing a digital currency outside of a blockchain network; this is something that the Federal Reserve Bank of the United States has previously mentioned.
Interestingly, financial regulators in Sweden have been among the few who have not outright condemned Facebook and it Libra cryptocurrency project. If anything, Riksbank officials feel that people in Sweden have been gravitating towards digital payments and even cryptocurrencies largely on their own; this shift makes them realize that traditional krona coins and bank notes are falling out of favor. If anything, regulators see a pressing need to prepare for a future in which hard currencies are no longer preferred.
Not all countries in Europe are contemplating a move towards digital currencies. Switzerland, for example, is in no hurry to investigate the prospect of a digital franc. In the case of the European Union, the various financial regulators will have to take up this issue for deliberation and a vote; however, it is not unreasonable to think that a digital version of the euro would take long to approve and develop. What remains to be seen is whether central banks will use versions of existing and proven blockchain protocols such as Ethereum, or if they will develop their own proprietary distributed ledgers.