CBDC Round-Up

2023 Plan for Sweden’s e-krona

The Riksbank has issued a public summary of its CBDC work. Part of this describes what will be tackled in 2023:

• Investigating the effects of an e-krona on the Swedish economy.

• Testing of the technical solution for the e-krona prior to the pilot focusing on offline payments and sustainability.

• Investigating whether and how an e-krona affects the Riksbank’s current mandate and what legal amendments are needed for the Riksbank to issue an e-krona.

• Having a dialogue with different authorities and the market, for example, via the external dialogue forum launched in 2022.

• Performing user studies aimed at end-users and traders.

• Preparing for a possible procurement of an issuable e-krona.

CBDCs in Circulation Could Reach 20-25% of All Money

IMF working paper 2023/009 describes the findings of a structural, choice-theoretic model used to understand what happens if an optionally interest-bearing CBDC is introduced. The model estimates the total demand for a CBDC relative to all forms of money, the drop of deposit rate spreads to policy rates, the impact on reserve needs, the implied rotation of profits away from banks toward central banks, and the extent to which monetary policy pass-through may become stronger.