( 2018a ) and sveriges riksbank ( 2018b. ) the riksbank first issued coins and then began during the first half of the 18th century to also issue banknotes. for a more detailed description, see for instance ogren and edvinsson ( 2014 ). 1 ference if there was no electronic money issued by the riksbank. is there a particular reason why the state, in countries all around the world, throughout history, has played the leading role with regard to issuing money? central bank money creates confidence even in privately - issued money to find the answer to this question, we must go back in time. during the 19th century, banks in sweden and several other countries were allowed to issue private banknotes that circulated together with the riksbank's banknotes. one lesson we can learn from this episode is that it worked well in the countries where people could rely on the privately - issued money being converted to central bank money, while it did not work so well in the other countries. 3 it is therefore understandable that in the end central banks were given the monopoly on issuing banknotes and coins. since then the system we have has worked well, with private banks being able to create electronic money that can be converted into the riksbank's money, cash. the state has also introduced guarantees and regulation, such as the deposit guarantee, which means that the general public can rely on its money being safe in the accounts with the private banks. during normal times, this all runs smoothly and we probably don't stop to think about it. but let's imagine what might happen in a financial crisis if cash was no longer a viable payment alternative. if we want to take out money from a bank we consider uncertain, our only alternative will then be to move electronic money from one bank to another. but in times of financial unease, confidence in the entire banking system may be shaken and in that case it will not help to move money from one bank to another. you have probably seen pictures of bank runs – when queues form outside banks in crisis as people want to withdraw their money in the form of ( safe ) cash. this is why central bank money is still the linchpin of the system, even if it is rarely used in normal circumstances. the fact that it is available as an alternative acts as a kind of guarantee for the private bank money. 4 it is also the case that some key systems for payments are increasingly

##s would be held in an account with the riksbank and in the other the e - kronas would be in the form of digital units of value ( tokens ) stored locally, for instance on a card or in a mobile app. both models would mean that the general public had the opportunity to hold money with the riksbank, so the difference between the two possible e - kronas is not really so great. to allow households and companies to use e - krona to save and make payments, it is necessary to have user applications or bearers of value, for instance in the form of a mobile app. but we believe that the market is better at producing this type of alternative than we are. the riksbank therefore does not necessarily need to supply e - krona to households and companies itself, it can instead offer an open infrastructure where other agents can create payment services that they offer to the general public. what we have decided to develop, build and test is a concrete proposal for a viable e - krona. based on the riksbank's current mandate, we will test a pilot version of the simpler, value - based version of an e - krona. this means that it will be a digital unit of value ( token ) that can be stored centrally or locally. it will at least not initially be interest - bearing, but will be fairly similar to cash. we also think there should be the possibility to make payments offline. by beginning development work, the riksbank will increase its preparedness to maintain the central bank ’ s traditional role in a future digitalised payment market. it will take a few years to develop an e - krona system. once we have tested the pilot version we can choose to issue, or not to issue, a digital krona to the general public. with regard to the account - based version, we consider that further analysis is needed, but that legislative amendments would also be required if it is to be realised. to make the choice of path regarding digitalisation of the payment market easier, we need a clear swedish stance that is based on political priorities and decisions. this includes a review of the sveriges riksbank act that clarifies the riksbank's mandate. it is also important to cooperate with other public authorities. the e - krona would have points of contact with many other authorities, for instance the tax account, to which all those who are to pay tax receive