Sweden’s Central Bank Governor has outlined a six-step plan on how the state bank can implement its own digital currency.
He outlined a checklist that needs to be completed before the idea is fully implemented. Sweden’s digital currency will have to meet the following criteria.
- It will have to be available 24/7 and allow for payments anywhere, no matter how big or small.
- Cross-border transactions are a must. The Swedish digital currency must also be easily convertible to other fit currencies, as well.
- Legal tender laws must be updated to include digital currencies in their jurisdiction.
- The digital currencies will be issued directly from banks themselves, with oversight from the Swedish Central Bank.
- Digital IDs will accompany digital currency to prevent money laundering and improper use.
- Physical cash must still be kept just as a safeguard in case the digital currency systems fail.
The timeline for meeting each six of these points is still open for discussion, but we probably cannot expect a fully fleshed-out Swedish digital currency until 2021, at the earliest.
Sweden’s Central Bank Governor just described a six-step plan on how they would implement their own digital currency:
– 24/7 payments anywhere
– Cross currency & borders
– Update legal tender laws
– Issued directly from the bank
– Digital IDs
– Physical cash incase it fails pic.twitter.com/I8XFGt8u4e
— Rhythm (@Rhythmtrader) November 22, 2019
Sweden Following China and Turkey
Sweden’s dive into digital currencies is in line with trends in other nations who seek to adopt a similar concept.
China, for example, says it is almost ready with its own state-backed digital currency, called the ‘DECP.’ It will be a pegged stablecoin, of course.
Other countries, like Turkey, plan on releasing similar state-backed stablecoins in the coming years.
In short, there is something of a ‘global arms race’ among nation-states over which one can be the first to release such a financial instrument.
The rise of state-backed stablecoins is a net boom to the cryptocurrency world but, ultimately, their purpose is to replace speculative cryptocurrencies.
However, Bitcoin’s resilience has proven that cryptocurrencies can’t simply be ‘replaced’ — they are part and parcel of the blockchain industry. Therefore, although these central banks believe they are creating stablecoins to replace Bitcoin, they will soon realize that such a task is near impossible.
Images courtesy of Twitter, Shutterstock.
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