Sweden could be the first country with crypto money. That would take the entire sector to a new level – and change the way money is handled forever. IOTA and Stellar are two well-known names in the race. At this point it is really exciting for crypto investors. Not only because an official cryptocurrency would boost the whole sector. But also because the Riksbank will hardly design the technical infrastructure for the E-Krona itself. Instead, around 40 projects have applied to the central bank. After a first elimination 19 are left!
The German-based Iota Foundation. And IBM, which wants to offer the protocol for the central banks to unlock their crypto currencies on Stelar. If IOTA or Stellar are actually selected as the basis of E-Krona, the much-criticized cryptosector will gain massive legitimacy at a stroke. Of course there is no deadline for the decision. It should take years.
Features of E-Krona
At the same time, of course, it is an opportunity: based on blockchain distributed ledger technology, it is now possible for the central banks to provide individuals with central bank money as well. This opens up completely new options in monetary policy. We are still a few years away from a potential launch, but there is already a first picture. For the development of E-Krona, the Riksbank has turned off ten full-time employees and a budget of the equivalent of approximately 340,000 euros. According to Riksbank, the E-Krona
- Do not replace cash and other payment methods, but supplement them.
- ensure access to central bank money for the public.
- serve as a means of payment and for value retention, such as cash.
- For small sums, you can also allow offline payments.
- may even allow anonymous payments.
- have a built-in option for paying interest.
- and be designed on the basis of a technical solution that allows an expansion of functions.
The Riksbank has already invented the paper money, as we know it today. And now you’re working on an E-Krona. The reason for this is not the “threat” of Bitcoin but a problem that involves turning away from cash. The saying “only cash is true”. In our daily lives, we do not even notice, but the money in our accounts is not the same as banknotes and coins.
When the going gets tough, only physical money is considered “legal tender”. The numbers that we send back and forth in digital form are merely arithmetic units that constitute a claim against the commercial bank. In the extreme case of a banking crisis, this money can be irretrievably lost. Therefore comes the need for deposit insurance.
Danger to the financial system?
Riksbank boss Stefan Ingves recognized: “If the cash completely disappears, the public would have only access to private bank money in accounts. But banks still have access to central bank money. ” In “normal times” that was no problem. But in times of crisis, public confidence in the banking system may waver.
From the point of view of the central bank, however, it is unacceptable to lose confidence in the monetary system. Then the central bank would have totally failed in its core task. This is the real reason why the non-cash Sweden is on the way to a true cryptocurrency further than any other country. Not because people want to take away cash, but because crowding out cash can be a real threat to the financial system in the long term.
E-Krona: Die vielleicht wichtigste Kryptowährung aller Zeiten was originally published on derbrutkasten.com. It was translated by the IOTA-News Community. The Community curates, examines, and summarizes news from external services while producing its own original material. Copyrights from external sources will be credited as they pertain to their corresponding owners. IOTA-News.com´s purpose is to make use of partial 3rd party content or pictures as either allusion or promotional endorsement of mentioned sites.