Foreign stablecoins and the e‑krona: implications for the Swedish krona

Stablecoins and demand for kronor

The Riksbank recently highlighted that the rise of foreign stablecoins, such as USDC or USDT, could eventually reduce demand for Swedish kronor. This warning reflects the fact that dollar-pegged tokens offer a fast, inexpensive alternative for cross-border payments, diverting some of the monetary flows normally directed toward the national currency. The central bank describes the concern as a “long-term risk,” although no immediate loss has been observed in foreign exchange markets.

Meanwhile, Riksbank Governor Per Jansson told Reuters that the absence of a Swedish version of digital currency, the e‑krona, would make the krona less competitive against stablecoins. This statement rests on the idea that economic participants, particularly small and medium-sized businesses and online commerce platforms, favor tokens offering instant conversion and lower fees. Jansson’s statement emphasizes that the krona’s competitiveness now depends on the country’s ability to offer a sovereign digital alternative.

The e‑krona project

In an inquiry report published in 2023, the Swedish government concluded that the need for a national digital currency was low. The study indicates that most electronic transactions already take place through bank cards and existing payment services, limiting the usefulness of an additional e‑krona. This conclusion does not mean that the subject has been abandoned, but that a higher priority is not currently justified.

Nevertheless, the Riksbank wants to prepare legislation for the e‑krona, estimating that implementation could take five years. The contemplated legislative framework would include reserve transparency requirements, liquidity safeguards and stronger oversight of technical intermediaries. This legislative ambition reflects the central bank’s desire to have an additional monetary policy tool, even though the perceived need remains limited.

Conversion and reserves

Stablecoins, by definition, seek to maintain parity with the US dollar, but departures from that peg can occur depending on liquidity available on exchanges. The underlying reserves, published by Circle for USDC and Tether for USDT, differ in composition and disclosure frequency, implying different levels of risk for Swedish users. Simply displaying a price of one dollar does not guarantee immediate, free conversion accessible to everyone holding kronor.

In practice, converting a stablecoin into Swedish kronor involves several stages: direct redemption with the issuer, subject to identity checks and possible fees, or a sale on a platform where liquidity depends on buy and sell orders. This chain of intermediaries creates a gap between the token’s displayed value and the actual price obtained by the person converting it, a crucial point for those considering stablecoins as a means of everyday payment.