Central Banks around the world are scrambling to respond to the increasing demands for government-backed digital currencies (CBDCs) due to the declining use of printed money. Sweden’s Central Bank is banking on eKrona, state-guaranteed digital money to facilitate local and international trades. Experts, as well as experienced investors, are betting on eKrona -a leading digital currency backed by the state that is projected to grow into a powerful retail digital currency. eKrona project started in 2017 when Riksbank embarked on research to establish a currency based on the already strong digital finance with more than 90% of payments in Sweden are done digitally.
Experts from PwC have highlighted Sweden’s eKrona and Ukraine’s eHryvnia as the most mature digital currencies in Europe. They analyzed the central bank websites among other sources such as the Atlantic Council, the press, and Google trends to gain insight into the trend and the maturity of the existing state-backed consumer-centric digital currencies.
Even as it is still under development, eKrona has been adopted by more than 10 million clients, overseeing a trading volume of $530.9 billion with over 5.6 billion payment transactions, making it the most popular government-guaranteed digital currency in Europe. The goal is to see 65% of all transactions done via eKrona, alongside 200 million investors worldwide at $5,000 per eKrona. How practical is this goal?
Given the latest developments, the goal is not far-fetched. The central bank of Sweden recently roped in external participants, Handelsbanken and Software firm TietoEvry, to help assess the integration between the participants’ existing systems and the technical platform for the eKrona pilot. The two firms are expected to help test the integration of the already developed payment flows with their internal systems.
The rising popularity of eKrona isn’t surprising, especially among those who have been following trends in the world of cryptocurrency and blockchain. The unpredictability of current financial markets has seen more people turning to invest in cryptocurrency to cushion themselves from the troubled global economy. However, the existing decentralized digital currencies have also proven to be quite challenging for investors due to their high volatility. The alternative, therefore, is the state-backed digital currencies like eKrona that offer better stability and usability.
Moreover, a recent survey involving 10,000 European investors, published by e-Krona Limited, revealed that eKrona is viewed as an “investment with the highest likelihood of success.”
“FTSE and NASDAQ indices show a worrying decline since the global coronavirus pandemic broke out almost two years ago. On the contrary, cryptocurrency has risen to unimaginable levels. While many hedge fund investors have been reluctant to invest in cryptocurrency due to its volatility, the emergence of government-backed digital currency, particularly eKrona, has been a blessing to European investors, and probably the world at large. This thing is irresistible. We are investing in it”- says Joseph Schneider, a famous hedge-fund investor based in Zurich.
As many investors look to invest in high-yield stocks, eKrona could offer one of the best opportunities, similar to what Bitcoin gave us a decade ago. We are seeing a cryptocurrency that is heading towards solving most of the retail transaction challenges, and that should come with the rise in price for the cryptocurrency, leading to a high return on investment for early investors.