Sweden's Riksbank has urged lawmakers to begin preparing legislation for a possible digital krona, even though it has not decided to launch a CBDC. In an Oct. 7 letter to parliament's Finance Committee, the central bank cited the ECB's digital euro pilot planned for 2027 and a potential public launch in 2029, as well as the growing use of stablecoins pegged to the US dollar. The Riksbank warned that if foreign-currency stablecoins become attractive as a means of payment, the Swedish krona could come under pressure even within Sweden, though it sees the near-term risk as limited. It estimates that introducing a digital krona would take at least five years, excluding legislative changes.
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The Riksbank formally asked Swedish lawmakers, in a communication published on October 15, 2026 and dated October 7, to begin preparatory work on legislation enabling a digital krona, while stating it has not taken a position on issuance. It cites deteriorating geopolitics, hybrid threats including cyberattacks, and the fact that roughly 95% of Sweden's financial sector is privately run, along with the European Central Bank's digital euro, which is planned for a pilot in the second half of 2027 and a possible launch in 2029 serving around 350 million people. The central bank judges the near-term risk from foreign-currency stablecoins to krona demand as limited, though not negligible over the longer term. Because technical preparation would take at least five years, it argues a public inquiry should start now, possibly leveraging the ECB's digital euro infrastructure, with the final decision resting with the Riksdag.
- Sweden Riksbank Recommends Digital Krona Preparations
Sweden's central bank, the Riksbank, has urged lawmakers to begin preparing legislation for a possible digital krona, three years after a government inquiry found insufficient need for one. In an Oct. 7 letter to parliament's Finance Committee, it cited the European Central Bank's planned digital euro pilot in 2027 and potential public launch in 2029, warning that Sweden's payment system could become less competitive without a comparable digital currency. It also flagged the growing use of foreign-currency stablecoins, particularly USD-pegged ones, as a longer-term concern that could pressure the krona, though it sees the near-term risk as limited. The Riksbank estimates a digital krona would take at least five years to introduce, excluding legislative changes, so it recommends starting legal preparations now even if Sweden ultimately decides against launching a CBDC.
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ECB President Christine Lagarde said euro-area inflation of 3.8% in September largely reflected high energy costs, which the ECB expects to ease next year. She said an energy shock could keep inflation above the target until the first half of 2027, so a measured policy response remains appropriate, as stated at the IMF Annual Meetings. Lagarde also said the ECB is preparing a digital euro to complement cash for everyday payments, aiming to boost innovation and competition in retail payments. Separately, Cointelegraph reported the ECB launched Pontes, a system letting financial institutions settle tokenized wholesale asset transactions in central bank money, with full implementation expected by 2028.
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- Euro slides to fresh lows against US dollar and British pound despite ECB rate hikes
The euro fell to about $1.111 on Wednesday, its weakest against the US dollar since mid-May 2025, and to roughly £0.842 against the pound, its lowest since early June 2025, despite two ECB rate hikes this year. The slide reflects soaring energy costs, a bond market revolt over French public finances and a stronger dollar, after US inflation rose to 3.7% in September and the dollar index hit an 18-month high. The ECB's deposit rate is 2.5%, well below the Fed's 3.75-4%, while eurozone inflation has climbed to 3.8%. The spread on French 10-year debt over German 10-year debt rose above 150 basis points, the most since the euro debt crisis around 2011, as French public debt hit a record 119% of GDP. Traders expect the ECB to hold rates on 29 October before raising them again later in the year.
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