IMF Staff Country Reports

This technical note looks at the systemic risks stemming from the potential issuance of Central Bank Digital Currency (CBDC) in Sweden, as well as the growing significance of the Fintech sector. The Riksbank has been one of the pioneers in the analysis of CBDC, has recognized risks, and has put in place a plan to mitigate them. The Riksbank committed to an e-krona design that fulfils the “do no harm” principle; that is, support public policy objectives and do not impede the central banks’ ability to carry out its mandate. While systemic importance of the Fintech sector seems limited, the sector should be monitored closely, as it could grow fast; firms are complex and highly visible. Widening the access to payment services could enhance competition and efficiency of the payment system. The note looks more closely at all risks, starting first with those arising from a domestic only e-krona demand. While scenarios are described separately for expositional purposes, they are not mutually exclusive, and demand for the e-krona can take all the forms underpinning the different scenarios at the same time.