It seems that the citizens of Sweden are no longer so keen on using cash in their everyday life. It is a fact that the usage of coin and paper money has significantly reduced in the last couple of decades. This is largely due to mobile payment services that are gaining momentum over the typical, cash payment methods we are all used to.
This conundrum had made the Swedish central bank wonder if it is maybe time for them to think about introducing the digital currency that would be governmentally backed. If they do decide to pursue such a course of action, should they use blockchain technology to do so?
Swedish Central Bank isn’t the only one who is considering using blockchain technology, but also many other governmental banks all over the world are considering the idea of producing digital currency for their countries. Considering the safety of those funds this is not a big surprise.
This, However, does have a certain irony to it is we take into account the fact that cryptocurrencies were created to combat the need for any central authority such as the bank. Besides that, there is a question of system design, maintenance, the effect on the country’s financial stability and so on.
It is a common speculation that new cryptos that would be tied to a specific central bank would be tokens that are going to be used a lot like cash money. It would be anonymous like the cryptocurrencies were designed to be but at the same time, the currency would be protected from a volatile market because it would be tied to a central authority.
Regardless of the path any of the governments take, the biggest issue in this debate is whether or not this is something that citizens of those countries want. Rod Garratt, an economics professor at the University of California, Santa Barbara says: “Will the public demand a digital medium of exchange with properties similar to cash? In places where it does, maybe there will be pressure for governments to provide it, and in places where it doesn’t, there won’t be.”