February 27, 2024

Swedish Central Bank intends to lead BIS initiative on the study of state cryptocurrencies

Sweden's central bank is awaiting approval from the country's parliament, as well as the Bank for International Settlements (BIS).Placement of the Innovation Center for the study of state cryptocurrencies.

The Bank of Sweden has published an application for placement incountry of the BIS Innovation Center. The new initiative aims to develop an understanding of the critical technology trends affecting central banks and serve as a focal point for a network of central bank innovation experts.

One of the Center's research areas isstate cryptocurrencies. Last month, the Bank of Sweden announced it had begun testing its own digital currency, so the authors of the application believe that the country's central bank has a “comparative advantage over other central banks” in hosting the Innovation Center.

Innovation Center of the Bank for International Settlements -it is not an ordinary non-governmental organization, but a “branch” of BIS, whose employees and activities are protected from local prosecution. The application of the Central Bank of Sweden says:

“Given that the Bank of Sweden has come a long wayin the analysis of state cryptocurrencies, it can, as required by the BIS from the Innovation Center, quickly provide analysis based on already established cooperation between the public and private sectors, scientists and other central banks. ”

Many central banks study the conceptissuing its own cryptocurrencies, but the Bank of Sweden has won the palm in this field. The Central Bank began to study the possibilities of state cryptocurrencies back in 2017 in connection with the rapid transition of citizens from using physical money to non-cash payments.

Over the past years, the Central Bank has achieved seriousprogress, which allowed in February to begin testing the state cryptocurrency of Sweden - the electronic crown. The Bank of Sweden believes that, thanks to its knowledge base, it is a strong contender for hosting the Innovation Center, and asks the Swedish Parliament and BIS to agree to this.

BIS Innovation Center

As noted in the application, the work of the Innovation Centerneed to finance. The Bank of Sweden asks the Parliament to allocate 30 million Swedish kronor ($ 3,203,500) per year for the five years of the Center, which is about half of the Central Bank of Sweden's annual dividends on BIS shares. The Bank of Sweden controls a 3.2% stake in BIS.

However, the Central Bank of Sweden considers this a profitable investment. Swedish citizens continue to refuse cash, regardless of whether there will be an Innovation Center in the country, and "there will still be a need to analyze the development of financial technologies in the payment market."

The fight for the location of the Innovation Center takes placeat a challenging time for BIS and central banks in general. Earlier this month, BIS expressed confidence that the world of payments is changing rapidly and published a report focusing on P2P payments, equity tokens and government-owned cryptocurrencies.

BIS report said private initiativesstablecoins pose a potential threat to the influence of central banks on monetary policy and financial stability. BIS researchers emphasized the need for a global response to the Libra initiative.

In recent months, central banks have alreadyThe issue of state cryptocurrencies has been repeatedly raised. In January, six central banks, together with the BIS, created a group to study government-owned cryptocurrencies, and in April, a group of central banks and the BIS will discuss the possibilities of issuing them.