COPENHAGEN (Reuters) – Introducing a digital version of the Danish crown currency would pose risks to financial stability without improving payment solutions for Danes, the central bank said on Friday.
Its view contrasts with the Riksbank in neighboring Sweden, which said last year it may become the first big central bank to create its own digital money as the use of cash declines.
“(A) central bank digital currency would present challenges to financial stability and would not provide any new opportunities for monetary policy,” the Danish central bank said in a statement.
Issuing e-crowns would also make the central bank a retail bank for households and businesses and make the central bank a “direct competitor to the commercial banks”, it said.
Denmark is home to Scandinavia’s largest payments service provider Nets (NETS.CO) which is in the process of being taken over by U.S. private equity firm Hellman & Friedman.
The Bank of England is also looking at the merits of introducing a digital currency for use by businesses and households.
The Bank for International Settlements (BIS) said in September it was too soon to determine whether central banks should issue their own cryptocurrencies, as the risks could not yet be fully assessed and the technology underpinning them is still unproven.
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