The central bank stated that scalability problems must find a solution and how its cash considerably reduced its use compared to other payment alternatives.

Riksbank, the state entity that controls every monetary policy of the European country, recently released the outcomes of the first phase of a pilot related to its digital currency issuance, which suggests a delay in launching such a program most minor until 2026.

This resolution comes from the Central Bank in a report at the end of March of this year. It highlighted a series of essential aspects found during the investigation, arguing that it was unnecessary to issue the e-krona and delay its development for the next few years.

Riksbank and the Needing of a Program like This

The Riksbank noted that all the main factors related to a CBDC found its solution during the test, noting that there is essential participation of end-users, merchants, and payment applications. But Riksbank stressed that certain critical elements still need a bit more improvement, especially when it comes to scalability.

The report reads:

“There is a”needing of more research to see if it can manage retail payments at the necessary scale and meet the requirements of digital central bank money.”

When it comes to talking about legality, the Central Bank said that the e-krona would count on the state’s support as a guarantor of value and that all this would be much more solid thanks to the creation of payment gateways. The Central Bank itself highlighted how a parallel payment network would make the entire financial picture even more reliable.

Privacy and Other Concerns

About risks like money laundering and the privacy policies regarding operations, the report stated:

“Anonymous “payments only work for a limited extent under current anti-money laundering legislation, and currently, only small amounts can face a transaction anonymously… Anonymous e-kronor may exist, but they would have an area of minimal use”.

Riksbank” also took into consideration more exciting factors that could benefit the current scenario. Riksbank highlighted that fewer people use cash, so applications and mechanisms to make digital payments are gaining more and more popularity.

The Riksbank is detecting several obstacles regarding the marginalization of cash and started this pilot project which turns to be a proposed technical solution for Swedish kronor in electronic form.

The director of the Riksbank project in Stockholm, Mithra Sundberg, also stressed that the intention is not to settle for current technology but that it is necessary to set a detection system for what is under the radar regarding issued digital currencies coming from the central bank.

The director also clarified that the intention is not to set replacements over cash immediately but that new legal concerns would be considered before its use becomes widespread.

By: Jenson Nuñez

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