CBDC News

Sweden Looks at CBDC and the Environment

Sweden’s Riksbank has started to look at the climate impact of adopting a Central Bank Digital Currency (CBDC). The study was based on 2021 data, so this is a first exploratory investigation.

A CBDC could be based in existing payment rails or distributed ledger technology (DLT). The degree of decentralisation will make a big difference, although there are then other trade-offs that need considering, such as security.

The study assumes that volumes would mimic those of cash and that the Riksbank would be the sole issuer and verifier of transactions.

Whatever route is chosen, a key factor for energy usage is whether the servers can use renewable energy.

A centralised approach would use similar infrastructure to today, but this has not been part of the Riksbank experiments to date.