Sweden's central bank, the Riksbank, has recommended to parliament that it should begin preparing legislation in case a digital krona is introduced.

Cointelegraph, a blockchain outlet, reported on Oct. 15 local time that the Riksbank is re-examining the need to introduce a central bank digital currency (CBDC), citing the European Central Bank's push for a digital euro and the spread of foreign currency-pegged stablecoins.

The Riksbank said legal work for a digital krona should be started without delay. This marks a change from a government inquiry three years ago that concluded the need for introduction was not sufficient. Swedish authorities have not decided to issue it immediately, but are putting more weight on establishing a legal foundation in advance.

It pointed to changes in the European Central Bank's timeline as a key variable. The European Central Bank is planning a digital euro pilot in 2027 and is also leaving open the possibility of an official launch in 2029. The Riksbank said that without a digital version of its currency, Sweden's payment system could lose competitiveness.

Foreign currency stablecoins were also cited as a long-term burden. The Riksbank warned that if foreign currency stablecoins become an attractive means of payment, use of the krona in Sweden could shrink.

It also cited a wide time lag between policy decisions and actual rollout. The Riksbank estimated it would take at least 5 years to introduce a digital krona. This did not include time needed for legal amendments. It said legal preparations should begin now even if it ultimately decides not to issue it.

This trend is tied to concerns over Sweden's payment sovereignty and the foundation for use of its currency. The digital krona remains at the policy review stage, but as competition over digital currencies in Europe accelerates, Sweden is moving toward speeding up institutional preparations.

A key point to watch is whether Sweden's parliament will actually begin legislative discussions. The Riksbank said it was not calling for an immediate issuance decision, but made clear it wants options kept open in case a digital krona becomes necessary.