Sweden reconsiders digital krona as digital euro and dollar stablecoins rise

Sweden’s Riksbank says the digital euro and dollar-backed stablecoins may soon warrant another look at a digital krona, although no issuance decision has been made. In an October 7 letter to parliament, it argued that changes since an earlier inquiry could justify reassessing Sweden’s need for digital central bank money.

Why the central bank is reopening the question

The issue of security is another motivating factor for contemplating the introduction of a digital krona. Because 95% of Sweden’s financial industry is managed by private institutions, the Riksbank is concerned about how the payment system can be safeguarded from cyberattacks or major disruptions. A digital krona may allow for payments made via the Swedish as well as the European payment systems regardless of outages in power and telecommunication systems.

A five-year build, if parliament ever says yes

While there is an increased interest in the idea of a digital krona, the Riksbank is not suggesting that it will be launched now. The letter from the Riksbank to the parliament stated clearly that this issue is still open.

“The Riksbank has not taken a position on whether a digital krona should be issued.”

— Riksbank, letter to the Committee on Finance

The introduction of a digital krona would require the approval of parliament. Even after receiving the necessary permissions, the central bank believes that it would take around five years to create the required infrastructure without factoring in the time needed to change any existing laws. Thus, a digital krona may only be introduced sometime after 2030, even if the lawmakers make this decision right now.

What the digital euro would plug Sweden into

The EU’s digital euro framework is moving forward, with talks anticipated to wrap up in 2026. The European Central Bank (ECB) aims to begin a pilot program in late 2027 and hopes to launch it by 2029, depending on legislation.

On September 15, the ECB announced a call for online and mobile merchants from the euro zone to take part in the pilot program. Selected companies will test a beta version of the digital euro in simulated payment environments. The results of these tests will help the ECB see how the currency would function in everyday transactions.

Designed for roughly 350 million euro-area residents, the currency would offer offline and conditional payments, but not programmable spending restrictions. Sweden worries that future European payment infrastructure could leave the krona at a competitive disadvantage.

Dollar stablecoins dwarf the euro field

A Token Terminal snapshot puts stablecoins at $301.4 billion, including $299.9 billion in dollar tokens (99.5%). Euro tokens hold just $913.1 million (0.3%).

Yet growth is accelerating. DECTA found eight MiCA-compliant euro stablecoins grew 128%, from $295.6 million to $673.9 million, over the year ending June 28, 2026. Trading volume rose 43.1% to $67.3 million.

Cryptopolitan also reported an increase of 189.5% in euro stablecoin capitalization from mid-2024. The Riksbank does not consider any imminent danger for domestic krona use. But it is wary of the risks associated with the use of digital krona in the long-term.

ECB alarm, ESM calm

An ECB speech warns that dollar stablecoins could deepen dependence on US-denominated settlement. By contrast, an ESM working paper finds the overall financial impact manageable, although banks could lose cheap retail deposits and rely more on costly wholesale funding. Its authors also flag illicit payments and regulatory arbitrage.

Meanwhile, Cryptopolitan reports that EU firms face a January 8, 2027, deadline to resolve remaining non-MiCA stablecoin exposures. Such restrictions may shift trading venues rather than eliminate dollar-token demand. For crypto markets, the immediate issue is payment infrastructure and liquidity, not an established price shock.