On Friday Sweden’s central bank Riksbank announced that Accenture would be its technology partner for an e-krona pilot project, a retail central bank digital currency (CBDC).
Riksbank made clear that the project was a test and no decision has been made about launching an e-krona. The trials will include payments via mobile phones, cards and watches, plus it will involve payment service providers, stores and the Swedish payment system.
The initiative is likely to involve multiple iterations, and the first phase will run to 31 December 2020. But the bank said it could extend the effort for an additional six years.
Riksbank started to explore the need for a CBDC in 2017 as a result of the declining use of cash. In 2018 just 13 percent of consumer purchases used cash, down from 39 percent in 2010. But a major driver is the private control over the payments infrastructure.
In a recent report Riksbank stated: “If the state, via the central bank, does not have any payment services to offer as an alternative to the strongly concentrated private payment market, it may lead to a decline in competitiveness and a less stable payment system.” Currently, consumers predominantly use debit cards and Swish for payments. The latter is a mobile payments app launched by six major Swedish banks.
The dominance of Alipay and WePay in mobile payments is also one of the drivers behind China’s soon-to-launch CBDC. And the European Central Bank stated the high cash penetration across the Euro area was a disincentive for launching a CBDC.
Meanwhile, eleven companies pitched for the current project, which was whittled down to three contenders, with Accenture chosen as the winner based on price and quality.
Accenture’s CBDC track record
While Accenture is one of the most experienced consultancies in terms of CBDC, to date most of its public work has focused on wholesale or institutional currency trials such as experiments and reports for Canada and Singapore.
A couple of months ago the consultancy also announced a deal with SAP. The two firms are using SAP’s platform for central bank payment systems to enable integration with blockchain payments as an add on, without the need for a radical overhaul of the underlying payments infrastructure.