Sweden’s central bank has tapped Accenture to develop its e-krona digital currency pilot project, the Riksbank announced in a press release Friday.
Accenture will build out the e-krona’s consumer-facing features – such as how a user would pay on various mobile platforms – and run them in a test environment with “simulated stores.” Its initial contract lasts for one year, but Riksbank said it is open to as many as seven years of tests.
Riksbank hasn’t committed to issuing an e-krona at this time.
Regardless of the limitations, the partnership, which the central bank intends to sign later this year, is set to move the Scandinavian nation’s long-awaited e-krona one step closer to reality.
Such a development could tap into Sweden’s growing aversion to physical cash. Swedes have flocked so readily to cashless payment alternatives that the Bank of Canada’s Deputy Governor Timothy Lane said physical kronas are falling out of use.
“You’re actually reaching a tipping point [in Sweden],” Lane said at the Philadelphia Federal Reserve’s November Fintech conference. “Merchants are increasingly refusing to accept banknotes and banks are increasingly not offering services to process banknotes.”
Cash-free financial headwinds prompted Riksbank to begin studying an e-krona long before the more recent central bank digital currency (CBDC) rush. In 2016 the bank’s Deputy Governor Cecilia Skingsley said Riksbank was “facing pressure” to move away from coins and bills the public largely balked at.
It then began to study an e-krona in depth. Two reports, the first in September 2017 and a followup one year later, outlined everything from a digital currency’s legal ramifications to its impact on bank lending rates.
Notably, those reports revealed Riksbank’s reticence to base any such digital currency on a blockchain or distributed ledger technology (DLT), which Riksbank labeled an “inefficient technology.” But its 2018 report nonetheless stated that “an e-krona should be able to interact with DLT solutions.”
It is not clear what technology Accenture’s proposed e-krona will utilize. Riksbank classified the procurement process in its June 2019 proposal solicitation, calling the information “important to national security” in a press release at the time.