Facebook’s libra coin a catalyst for reform, Swedish central bank chief says

Facebook’s proposed cryptocurrency libra has served as an incentive for global central banks to reform and reflect the digital age, the head of Sweden’s central bank has said. “It has been an incredibly important catalytic event to sort of shake the tree when libra showed up out of the blue, and that forced us to think hard about what we do,” Stefan Ingves, governor of the Riksbank, told CNBC’s “Squawk Box Europe” on Tuesday.

“Part of my job is to produce a good/service called the Swedish krona which is convenient to use for Swedish citizens, and if I’m good at that in a technical sense then I don’t have a problem,” Ingves said. “But if I were to start issuing 20-kilo copper coins the way we did in 1668, then we soon would be out of business.”

The Riksbank has been exploring the potential issuance of digital currencies as cash use in Sweden declines dramatically. Many stores in the country don’t even accept physical notes and coins, with signs being put up by multiple retailers to say they don’t let customers pay in cash. The Riksbank is now looking to pilot the so-called “e-krona” currency this year, which it says could be introduced should the bank “wish to do so.”

Other central banks have ramped up their efforts in the digital currency space since Facebook announced plans for its libra coin back in June. China’s central bank for instance has said it is close to launching its own digital currency, while the Swiss National Bank last week said it was exploring the use of virtual currencies in trading.