E-krona: Will Sweden Be First With a National Cryptocurrency?

E-krona: Will Sweden Be First With a National Cryptocurrency?

As the global interest in cryptocurrencies increases, more and more countries and governments are looking into the possibilities of a nation-based digital currency. Several countries are working on how and if a cryptocurrency could be introduced within a limited jurisdiction, and Sweden is currently at the forefront of a digital currency called the e-krona.

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We have previously reported on how Japan and Russia are planning to launch their own digital currencies. We also mentioned that England started evaluating the possibilities but that project has since been canceled.

What we haven’t mentioned is that the Swedish government and the central bank of Sweden are leading the development. In fact, Sweden is one of the few candidates that has a plan for a possible launch of a nation-wide cryptocurrency.

The Swedish cryptocurrency will be called e-krona and it will be pegged to the Swedish krona. That means that the e-krona won’t be its own currency but rather a digital version of the currency that’s already being used in Sweden.

The reason why the Swedish central bank is working so hard on this project is because the world is slowly moving towards a cash-free society, which is a field that Sweden is also leading in.

In 2012, the six leading banks in Sweden launched a mobile payment app called Swish and since then the usage of cash in the country has fallen dramatically. Back in 2010, Sweden had 100 billion Swedish kronor in circulation, but 8 years later today that number is 40% less at just under 60 billion kronor.

When considering these numbers, a digital currency would be a natural step for Sweden.

The project is still being researched and a decision about whether or not the currency will be introduced won’t be made until December 2018. If the government votes yes for the e-krona an introduction phase will be started. According to today’s action plan, the e-krona could be launched in 2020 which would mean that Sweden could become the first country to ever create a nation-based digital currency.

Eva Julin, who is in charge of the project at Riksbanken, says that the important part right now is not the actual e-krona. Instead, Julin emphasizes that the Swedish central bank should prepare for the future and be ready to adjust to a cash-free society.

E-krona and Other National Cryptocurrencies

Several countries are currently planning to launch digital currencies in the coming years. Other countries have started exploring the possibilities before deciding against the idea.

A couple of weeks ago, we heard that the Bank of England (BoE) was evaluating if an English digital currency would work but they have were forced to cancel their plans because the risk of their regular currency being affected was too high.

The President in Venezuela was almost ready to launch his version of a country-specific digital currency pegged the country’s oil.

He even set a date for when the white paper was supposed to be published. However, just days after he announced that the currency was almost ready, the Congress voted to declare it illegal and the project was shut down.

In Japan, the government has come equally as far as Sweden with their development and they are planning to introduce the J-Coin in connection with the Olympic Game in Tokyo 2020. Just like the e-krona will be pegged to the Swedish krona, the J-Coin will be based on and pegged to the Japanese yen. The goal with the J-Coin is to simplify payments for products and services in a country where cryptocurrencies are already popular.

Additionally, Vladimir Putin has declared that he has plans to create a Russian cryptocurrency. The digital currency of Russia is jokingly called the cryptoruble and is currently being researched. Putin has two reasons as to why he wants to introduce a digital currency in the country. The first being that he has a personal interest and a fascination for Ethereum as a blockchain. The second and more important reason is that a cryptocurrency could help the country avoid sanctions from the West.

What’s the Difference Between a Regular Cryptocurrency and a Country’s Cryptocurrency?

The digital currency of Russia is jokingly called the cryptoruble and is currently being researched. Putin has two reasons as to why he wants to introduce a digital currency in the country. The first being that he has a personal interest and a fascination for Ethereum as a blockchain. The second and more important reason is that a cryptocurrency could help the country avoid sanctions from the West.

What’s the difference between a regular cryptocurrency and a country’s cryptocurrency?

Don’t forget that there are big differences between country-specific cryptocurrencies and “regular” cryptocurrencies. The biggest difference is that these type of cryptocurrencies are always based on a country’s existing currency or another asset, which means that they are not decentralized (one of the most important aspects of a cryptocurrency). Instead, they will function like a digital version of an already established method of payment.

Naturally, this means that a nation-wide cryptocurrency won’t function or operate in the same way as Bitcoin or Ethereum. For example, you will not be able to buy e-krona in the same way that you can invest in invest in Bitcoin.

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