Sweden’s central bank has asked parliament to begin preparing the legal groundwork for a possible digital krona, arguing that waiting for a final launch decision could leave the country short of time if payments trends shift. In an Oct. 7 letter to the Finance Committee, the Riksbank said no decision has been made to issue a central bank digital currency, but the legislation needed to permit one should be examined now.
The bank said building the systems, preparing the financial sector and rolling out a digital krona would take at least five years, with any legal changes likely to add more time. The request reflects a change in urgency since a 2023 government inquiry concluded there was not enough public need for a state-backed digital currency at that time.
Why the Riksbank wants legal work to start early
The Riksbank told lawmakers that Sweden should first determine what legal changes would be required for the central bank to issue a digital version of the krona. Its position is that preparatory work should begin before any final political decision on launch, because the practical and legal timetable would be long.
This is not the first time the bank has raised the issue. In March 2026, it recommended a government inquiry into the legal requirements for an e-krona, the name used in earlier stages of the project, and suggested that inquiry begin once European Union rules for the digital euro were complete and the European Central Bank had decided whether to proceed.
Sweden has already spent years studying the concept. From 2017 to 2023, the Riksbank examined technical, economic and legal questions around central bank digital money, and its technical pilot ended in 2023. The bank has since continued to track international developments.
How the assessment changed after 2023
A government inquiry published in 2023 found that Sweden did not then have sufficient reason to introduce a digital krona, while leaving open the possibility that future changes could alter that conclusion. The Riksbank now says those changes are beginning to emerge.
According to the central bank, a digital krona would give the public another way to hold and use state-issued money alongside cash. Unlike deposits at commercial banks, such holdings would be a direct claim on the Riksbank. The bank has maintained that any digital krona would complement notes and coins rather than replace them.
Digital euro plans are adding pressure
A central concern in the October letter is the ECB’s progress on the digital euro. The ECB plans to start a 12-month pilot in the second half of 2027 and is working toward possible issuance in 2029, subject to legal approvals and a separate decision by its Governing Council.
The pilot is expected to involve 19 national central banks and 36 banks and payment firms, covering online shopping, in-store payments, mobile payments and person-to-person transfers. Participants would use a trial version without legal tender status, allowing the ECB to test how the system would work before any final issuance decision.
For Sweden, which is in the EU but does not use the euro, the Riksbank sees a strategic risk: a digital euro could become attractive enough for consumers and businesses to weaken the competitiveness of krona-based payment services. In its March 2026 payments report, the bank also explored whether a future digital krona might run on the same technical platform as the digital euro through an arrangement with the ECB, citing possible cost savings, compatibility gains and access to planned offline payment functions.
Stablecoins are part of the concern
The Riksbank also pointed to rising interest in foreign-currency stablecoins, especially dollar-linked tokens, as a possible longer-term challenge to domestic krona use. It said the immediate risk is limited, but warned that such assets could become more appealing as payment services improve.
The bank has previously said stablecoins may offer payment efficiencies while still exposing users to risks tied to private issuers and reserve management. In its March report, it noted that stablecoin holders depend on the issuer being able to redeem tokens at face value and therefore on the maintenance of sufficiently liquid reserves.
That debate is no longer theoretical in Sweden. In June 2026, Frankfurt-based AllUnity launched SEKAU, a privately issued Swedish krona stablecoin under the EU’s Markets in Crypto-Assets Regulation. The token, backed 1:1 by krona reserves, was introduced for institutional settlement, cross-border payments, treasury use and digital asset transactions across several blockchain networks.
What happens next
The immediate step before Swedish lawmakers is not a launch decision but a review of the legal framework that would be needed if the country chose to issue a digital krona. The Riksbank’s message is that this work should begin early because legislation would likely outlast even the already lengthy technical rollout.
At the European level, the digital euro remains contingent on the completion of the EU legislative process. The European Parliament approved its negotiating position in July after committee action in June, but talks with the Council must still continue, and the ECB would still need to make a separate issuance decision. Sweden’s own choices on a digital krona are therefore unfolding alongside, not after, the wider European timetable.
Source: crypto.news