Sweden Starts Testing Its Own Virtual Currency

Sweden takes the lead in the creation of virtual government currencies by starting to test its own virtual currency, the e-krona. Sweden Starts Testing Its Own Virtual Currency

Virtual currencies have long since ceased to be a curiosity and have become a necessity. Any company or organization that wants to successfully integrate itself into the trends of the 21st century, must have knowledge about Blockchain and cryptocurrencies. But for governments like Sweden’s, keeping up to date in this sector seems less and less an option and more an obligation.

Governments on Blockchain.

Sweden Starts Testing Its Own Virtual Currency

The interconnection of the world economy through the international financial system has been a fundamental element for the unprecedented welfare created in the last century. However, this does not mean that the international economy is perfect. On the contrary, it has many flaws that can be fixed by the action of technology.

More specifically, Blockchain technology can be instrumental in improving aspects of international finance. Especially, the gap between the enormous usefulness of commercial banks, and the difficulty of them to reach the whole population. Leaving huge segments of the unbanked population.

To this would be added the complexity of executing international money transfers, with high commissions and waiting times. As well as the competition that virtual currencies have placed on fiat money. By creating an alternative beyond government control.

This last challenge became very clear from the announcement by Facebook of the future launch of its own virtual currency in Blockchain, Libra. A currency with the potential to represent a challenge for the world’s governments. Because of the financial and technological muscle that would support Facebook in this project.

Sweden Starts Testing Its Own Virtual Currency.

It is because of this challenge that multiple governments around the world would be developing their own virtual government currencies.

The best known case being that of the virtual yen in China. But it is not the only one in existence, as other countries like Sweden would already be testing their own virtual currencies.

Thus, the Nordic country has announced the beginning of tests of e-Krona, a virtual version of its official currency.

A trial period will last 1 year, during which it is planned to solve the potential problems that would arise with this currency, and it will then be launched to the public.

Sweden’s plan is to make its virtual government currency available for conventional payments for goods and services. As well as financial activities of all kinds in the country. T

his would put Sweden at the forefront of the governments’ race to develop their own virtual currencies in Blockchain.

Banks are beginning to feel the threat of their disappearance.


For several years now, commercial banks have been calling for a level playing field between fintech, bigtech and financial institutions. Technology firms, like other companies, are increasingly eating up ground from the banks.

Among the most profitable businesses of financial institutions are consumer credit and means of payment, now divided between banks, technology firms and even telephone operators and other companies, although financial institutions still dominate the market.

Experts, however, believe that in less than a decade this market will be much more atomized, and the banking part will represent less than 50% of the business of means of payment and consumer credit.

To this cut in the banking business, which until recently was enjoyed almost exclusively by financial institutions, must be added negatively the low profitability of the sector and the increasingly less beneficial credit activity. And there is no longer any question of the custody of private individuals’ deposits.

What can banks do?

It can defend itself like a cat on its back. Those in charge of financial institutions insist that a country’s economy cannot survive without a healthy banking system.

Who would be the intermediary in granting credit to companies, especially SMEs, and individuals if the banks did not exist?

This statement may be true. Banking currently plays a fundamental role in the economies of States.

But what will happen in the not so distant future, the leading role of banks will be so fundamental?

For some experts, and whose number is increasing, it seems that it will not. Or that is the debate that has opened up in recent months, and which was one of the protagonists at the World Economic Forum in Davos.

The debate.

Sweden Starts Testing Its Own Virtual Currency

But the origin of the debate on the future role of banking in the world was not centred on the threat of fintech or bigtech, but on cryptocurrencies.

The central banks, led, as is logical in Europe by the ECB, have begun to analyse the convenience or not of creating their own digital currencies, with their pros and cons, something which in the case of the Old Continent would be the foundation of a eurocoin.

So far, six central banks:

  • The Bank of Canada
  • The Bank of England
  • Central Bank of Japan
  • The ECB
  • The Bank of Sweden and;
  • The Swiss National Bank

Together with the Bank for International Settlements (BIS). Have set up a consortium to investigate whether or not to create their own digital currencies. In order to counter the Facebook-led Libra project or the digital Yuan planned by the People’s Bank of China.

Managers of these central banks aim to create standards to regulate how crypto-currencies will be used in international real-time transfers and in their security measures.

Sweden Starts Testing Its Own Virtual Currency.

But what initially appears to be a positive project for the world economy may become a major new threat to commercial banking as we know it today.

It may mean the unbanking of the customers of commercial financial institutions. It all depends on whether it is the central banks and governments that implement these digital currencies, or whether commercial banks are involved.

For the moment, Switzerland has taken a step considered a threat to banking. By giving the green light to statutes that allow a company to directly create its shares in blockchain.

Certainly ,  this would allow a public offering to be launched and its shares to be traded on the secondary market. Without the intervention of banks and other traditional financial and legal intermediaries.

This is in addition to the experience of Sweden, where the use of cash is almost marginal. It is an endangered species.

As a result many shops, public transport, museums or institutions no longer allow Swedes to be paid in cash. It is no longer just card payment, but increasingly mobile phone, tablet or even microchips implanted under the skin.

Not to replace cash.

Sweden Starts Testing Its Own Virtual Currency

Finally Sweden’s idea is that the new virtual currency can complement, not replace, cash. Therefore the rest of the European central banks are watching the country’s progress very closely.

Meanwhile, in Spain more and more non-banking players are starting to operate in means of payment. The new payment service standard, known as PSD2, makes it easier for more companies in different sectors to access this business.