8 THE NEED FOR AN E-KRONA
payees becoming less interested in using cash, then the trend will not be broken because
access to cash increases or is maintained.
1.2 Many central banks are analysing central bank digital
currencies
Central banks have been supplying a form of digital money since the 1980s, through their
central bank settlement systems for large-value payments between banks.
This money is
banks’ deposits with the central bank. A central bank digital currency (CBDC) refers to digital
central bank money that is more widely available, for instance to the general public.
Many
central banks are currently investigating the possibility of issuing CBDC and different CBDC
concepts are being discussed in various contexts. The Riksbank and Nordic central banks have
mainly been interested in a version that is broadly available to the general public, while other
international interest has been greater with regard to a CBDC with a more limited
counterparty circle, and often in connection with questions regarding new technology in the
form of distributed ledgers (DLT) and blockchains. The current systems for large-value
payments are starting to become outdated in a number of central banks. The central banks
in, for instance, Canada, Singapore, Japan and the euro area have started pilot tests to
investigate whether interbank payments based on DLT can be made safer, more efficient and
cheaper than in the current systems based on central databases.
Technological
developments in the field move very quickly and it is difficult at present to say what DLT can
make possible both in terms of interbank payments and other areas of use in the future.
Some central banks have shown an interest in a CBDC that is also accessible to
households and companies. Most of the investigations of this type are purely theoretical and
analyse possible motives for issuing a CBDC and the consequences for the central bank's
balance sheet, monetary policy and financial stability. The Bank of England and the Bank of
Canada, for instance, have published a number of articles in this field.
In the Nordic region,
the question of a CBDC that is accessible to the general public has become topical as a result
of the low use of cash. The Nordic countries have produced several reports and analyses
concerning CBDC.
The group of central banks interested in CBDCs offered to the general public also includes
countries in Asia, Latin America and Africa.
The arguments in favour of analysing a CBDC to
be offered to the general public have been based on the idea that a CBDC is expected to
increase financial inclusion and reduce the use of cash, which is considered costly, risky, to
have negative environmental effects and to facilitate the black economy.
See Erlandsson and Guibourg (2018).
The central bank settlement system in Sweden is the RIX system.
See BIS (2018). This is a very new area and the terminology has not yet converged on an established standard. On an overall level,
CBDCs can be divided into two main groups; wholesale CBDC and general purpose CBDC, depending on the counterparty circle that will
have access to them. A wholesale CBDC is in general aimed at a counterparty circle that is broader than those who can take part in the
central bank’s central clearing system and outside of the clearing system's opening hours. In addition to banks and clearing organisations,
insurance companies, securities dealers and asset managers would also be able to hold this type of CBDC. With a general purpose CBDC,
the counterparty circle is expanded even further to include all economic agents, that is, companies, associations and households.
See, for instance, Project Jasper https://www.payments.ca/sites/default/files/29-Sep-17/jasper_report_eng.pdf, Project Ubin
http://www.mas.gov.sg/Singapore-Financial-Centre/Smart-Financial-Centre/Project-Ubin.aspx, Project Stella
https://www.ecb.europa.eu/pub/pdf/other/stella_project_leaflet_march_2018.pdf and Project Khokha
https://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/8491/SARB_ProjectKhokha%2020180605.pdf
See, for instance, Engert and Fung (2017), Davoodalhosseini (2018), Kumhof and Noone (2018) and Meaning et al. (2018).
See, for instance, Central bank of Iceland (2018), Grym et al. (2017), Gürtler et al. (2017) and Norges Bank (2018).
See, for instance, Uruguay http://www.bcu.gub.uy/Comunicaciones/Paginas/Billete_Digital_Piloto.aspx, Venezuela
http://www.bcv.org.ve/notas-de-prensa/presentaron-el-whitepaper-del-petro-en-el-bcv, the Philippines:
http://congress.gov.ph/press/details.php?pressid=8212 Indonesia: http://www.thejakartapost.com/news/2018/01/29/bank-indonesia-
considers-issuing-digital-rupiah.html