Sweden’s Central Bank Wants to Host Innovation Hub for Digital Currencies

The Riksbank, Sweden’s central bank that started testing its own central bank digital currency (CBDC) in February, wants to host the digital currency innovation hub by the Bank for International Settlements (BIS).

Officially announcing the news on March 6, the Riksbank noted that in order for the hub to be located in Sweden, the bank would need to undertake a number of measures to co-finance the activity. 

As such, the Riksbank proposed an amendment to the Sveriges Riksbank Act, asking the Swedish parliament, the Riksdag, for approval to finance the activities of international organizations.

The Riksbank requested the parliament for permission to co-finance such activities for a period of five years and at a maximum cost of 30 million Swedish kronas ($3.1 million) per year, should the BIS chooses to establish a hub in Sweden.

The Riksbank circulated a referral on the amendment proposal on Jan. 23, 2020, noting that the majority of referral bodies like other authorities, organizations and stakeholders either supported the proposal or have no objection to it.

Other hub locations include Switzerland, Singapore and Hong Kong

As reported, the BIS has been actively establishing the BIS Innovation Hub over the course of 2019 in order to bring together global central banks to bolster the global payment and financial system. 

The initial locations of the Hub’s multidisciplinary teams included Switzerland, Singapore and Hong Kong. As reported by Cointelegraph, Switzerland has been actively researching CBDCs and distributed ledger technology infrastructure within the hub.

Sweden’s move to establish a BIS innovation hub falls in line with the increasing digitization of payment services in the country alongside a rapid decline in the use of cash, the Riksbank noted. 

As the Riksbank has been progressing with its own CBDC, inclusion in the BIS’ innovation hub ecosystem would be crucial as the bank “has a comparative advantage in relation to other central banks,” the bank said.

Sweden’s central bank first revealed its plans to create a pilot platform for the e-krona in December 2019. In order to build the platform, the Riksbank partnered with Irish professional services company Accenture. On Feb. 20, Sweden started testing the e-krona, announcing that the pilot would be in operation for one year.