According to the Reuters reports, commercial banks in the country are considering whether the rollout of the e-krona could undermine their role in the financial system, effectively removing banks as a middle man between consumers and the central Riksbank. Noting the more attractive interest rates and consumer protections, Masih Yazdi, the chief financial officer of Swedish bank SEB, said: “a rational household would hold its money with the Riksbank.”
Riksbank Deputy Governor downplays the risk.
A trend towards greater reliance on digital currencies could ultimately deprive commercial banks of liquidity, which Yazdi suggests could see more institutions relying on wholesale markets to source funds: “If you have a bank account but you can – at the click of a button – move your money to the central bank … that could risk instability in the system.” However, the risks were downplayed by Riksbank Deputy Governor Cecilia Skingsley, who noted that treasury bills already offered an effective opt-out for parties to exit the banking system. “We already have to face the risks that there are cyber runs out of the banking system. I don’t think a CBDC will fundamentally change that to a worse situation,” he added.
Central banks continue to explore CBDCs.
Several major central banks are now actively researching central bank digital currencies and making plans for real-world testing. Though many smaller economies have already launched versions of their digital currencies, China is the only major one to complete the development and initiating a full-fledged plan to test the digital yuan. As reported earlier, the Cayman island launched a national digital currency this year. Countries including Canada, Japan, the Philippines, and many others are actively exploring CBDCs.