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Riksbank may not use DLT for e-kronor, says Julin - Central Banking

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Julin stressed that – despite the weight of expectations – no decision has been taken by the Riksbank’s board actually to issue e-kronor. But the approach being investigated is to have a value-based central bank digital currency (CBDC).

This would act as a retail digital ‘wallet’ held with the central bank that would offer no interest. There are no current plans to use e-kronor as a transmission tool for monetary policy – for example by imposing negative rates on funds held with the central bank.

Julin says the Riksbank is not particularly worried about a substitution of funds away from commercial banks to e-kronor, at least in “in normal times”. “Of course, when it comes to stressed situations and financial surprises, maybe we will see a flight to security,” says Julin. “But maybe that is a good thing, that people can go to a safe place in those kinds of circumstances.”

Julin said Riksbank findings indicate there would “be minor problems” of deposits being pulled from commercial banks during a stressed environment, adding: “And of course they can always come to the central bank and lend from us.”

Riksbank may not use DLT for e-kronor, says Julin - Central Banking:

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