In a bid to play catch up with technology companies and younger generations of consumers, central banks are finally starting to take digital currencies seriously. Countries such as Sweden, China, and India have establish pilot digital currencies – respectively, the e-krona, e-yuan and e-rupee – via their central banks. In the finance sector, these are known as central bank digital currencies (CBDCs).
The purpose, scale and status of such efforts vary considerably. In Sweden, the goal is to investigate the potential transition from banknotes to a digital currency, and the e-krona remains in the starting blocks. In China, the “digital renminbi” started to roll out in 2020, and its goal is to allow the state to better control the retail economy. India launched an e-rupee pilot in 2022 and its purpose is to facilitate a broad range of transactions. Meanwhile, the United States is exploring the potential repercussions of establishing its own digital currency.
