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Gabriel Soderberg, Ms. Marianne Bechara, Wouter Bossu, Ms. Natasha X Che, Sonja Davidovic, Mr. John Kiff, Ms. Inutu Lukonga, Mr. Tommaso Mancini Griffoli, Tao Sun, and Akihiro Yoshinaga
Central banks are increasingly pondering whether to issue their own digital currencies to the general public, so-called retail central bank digital currency (CBDC). The majority of IMF member countries are actively evaluating CBDCs, with only a few having issued CBDCs or undertaken extensive pilots or tests. This paper shines the spotlight on the handful of countries at the frontier in the hope of identifying and sharing insights, lessons, and open questions for the benefit of the many countries following in their footsteps. Clearly, what can be gleaned from these experiences does not necessarily apply elsewhere. The sample of countries remains small and country circumstances differ widely. However, the insights in this paper may inspire further investigation and allow countries to gain time by building on the experience of others. Importantly, the purpose of this paper is not to evaluate the courses taken by different jurisdictions, but to study and discuss their key experiences and lessons. The paper studies six advanced CBDC projects, drawing on collaboration and exchanges with the respective central banks to get insights beyond what has previously been published. Unless a specific published source is cited, all information stems from interviews and workshops with members of CBDC project teams in each jurisdiction.
International Monetary Fund. European Dept.

The Pros and Cons of Central Bank Digital Currency: Insights from the Riksbank’S E-Krona Project The Riksbank’s e-krona project is more advanced than similar projects of most other central banks in developed economies. The e-krona could entail substantial benefits to Sweden, including further increasing the efficiency of the payments system while safeguarding against substitution of the Swedish krona by global stablecoins, enhancing crisis preparedness, and ensuring inclusiveness of digital payments. The e-krona pilot project—a proof of concept—will help

International Monetary Fund. European Dept.

) 623–7201 E-mail: publications@imf.org Web: http://0-www-imf-org.library.svsu.edu Price: $18.00 per printed copy International Monetary Fund Washington, D.C . © 2021 International Monetary Fund Front Matter Page SWEDEN SELECTED ISSUES March 5, 2021 Approved By European Department Prepared by Florian Misch with input from Jana Bricco and under the guidance of Khaled Sakr. Contents THE PROS AND CONS OF CENTRAL BANK DIGITAL CURRENCY: INSIGHTS FROM THE RIKSBANK’S E-KRONA PROJECT A. Context B. Main Benefits C. Main Risks D

Gabriel Soderberg, Ms. Marianne Bechara, Wouter Bossu, Ms. Natasha X Che, Sonja Davidovic, Mr. John Kiff, Ms. Inutu Lukonga, Mr. Tommaso Mancini Griffoli, Tao Sun, and Akihiro Yoshinaga

.” Journal of Monetary Economics , forthcoming. Atlantic Council . 2021 . “ Central Bank Digital Currency Tracker .” Accessed on December 17, 2021. https://www.atlanticcouncil.org/cbdctracker . Armelius , Hanna , Paola Boel , Carl Andreas Claussen , and Marianne Nessén . 2018 . “ The E-krona and the Macroeconomy .” Sveriges Riksbank Economic Review 2018 ( 3 ): 43 – 65 . Armelius , Hanna , Gabriela Guibourg , Stig Johansson , and Johan Schmalholz . 2020 . “ E-krona Design Models: Pros, Cons and Trade-offs .” Sveriges

Gabriel Soderberg, Ms. Marianne Bechara, Wouter Bossu, Ms. Natasha X Che, Sonja Davidovic, Mr. John Kiff, Ms. Inutu Lukonga, Mr. Tommaso Mancini Griffoli, Tao Sun, and Akihiro Yoshinaga

percent. ECCB, DCash : No decision has been made to formally issue DCash. In March 2021, the ECCB launched a pilot program to successively extend DCash throughout the countries of the Eastern Caribbean Currency Union (ECCU) and run the program for 12 months. Given its rapid adoption, ECCB is now considering transitioning to an official CBDC launch. Sveriges Riksbank, e-krona : No decision has been made to issue the e-krona. The Riksbank has developed a proof of concept and is exploring technological and policy angles of CBDC. A government inquiry is investigating

International Monetary Fund. European Dept.

. At the same time, the authorities recognize that further action may be necessary. The Riksbank’s e-krona project has raised considerable national and international interest. The consultation responses on the Riksbank’s second e-krona report, indicate a need to involve a wider set of institutions and a broader scope of additional policy measures in further analysis of how to address challenges from changes in payment patterns and payment markets in Sweden. Since this issue is of considerable importance, a broader inquiry into the challenges posed by the changes in

International Monetary Fund. European Dept.

providers to dominate payments without a viable alternative prompted the Riksbank to launch the e-krona project in 2017 to evaluate over a few years the issuance of a CBDC. This work has included an initial assessment of the demand for e-krona, at roughly 1–2 percent of GDP. 6 An exploration of financial stability implications notes that banks would be no more vulnerable to institution-specific deposit runs, as they already face the risk of deposit transfers to other banks. In further work, the authorities should also explore regulatory options to ensure reliable and

International Monetary Fund. European Dept.

1. Progress on Climate Change and Need for Investments 2. Sweden’s E-krona Project 3. Female Participation and Gender Equality in Sweden FIGURES 1. Selected Indicators 2. Selected Monetary Policy Indicators 3. Selected Banking and Corporate Sector Indicators TABLES 1. Selected Economic Indicators, 2018–26 2. General Government Statement of Operations, 2018–26 3. Public Sector Balance Sheet, 2010–19 4. Balance of Payments Accounts, 2018–26 5. Financial Soundness Indicators, 2015–20 ANNEXES I. Debt Sustainability Analysis II

International Monetary Fund. European Dept.

2016 FSAP Recommendations VII. The Riksbank’s E-Krona Project VIII. Risk Assessment Matrix