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MONEY

What you need to know about Sweden’s plans for a digital currency

Sweden has taken one step closer towards its own digital currency – the “e-krona”.

Published: 12 April 2021 07:41 CEST
A woman rejecting cash.
A digital currency is not meant to replace cash in Sweden. Photo: Fredrik Sandberg/TT

Plans to launch Sweden’s own digital currency, which have been in the pipeline since 2016, recently passed the first pilot stage, the country’s Central Bank (The Riksbank) announced in a press release.

So why is Sweden doing this?

Cash is dying a slow death in Sweden, with alternative methods of payment commonplace. The number of notes and coins in circulation has reduced by 40 percent since 2009, while popular smartphone apps like Swish allow electronic payments to be made almost as quickly as handing over physical money. Swedes are also among the world’s biggest card users.

“Sweden is noticeably further ahead than the UK, mainland Europe and the US, which is a long way behind in this trend. Because of how technologically developed it is, you see a lot of new interesting things in economics quite a while before you see it elsewhere,” HSBC global economist James Pomeroy told The Local back in 2018.

But what does a cashless society truly mean?

Sweden has previously been predicted to transform into a cashless society by 2030 with 80 percent of retail payments already made by card.

Concerns have been raised, including by the Riksbank, about how the cashless society affect certain groups, for example international residents who can’t sign up for certain digital payment methods without a Swedish bank account or personnummer, and the elderly.

So although physical payments are declining, the Riksbank wants the e-krona to be seen as a complement to cash.

The piloted digital currency also has similarities to cash. E-kronor are uniquely identifiable and can only be created by the Riksbank, similar to actual physical money.

How exactly would an e-krona work?

The e-krona used in the Riksbank’s pilot project uses blockchain technology and is in the shape of a singular “token”. Transactions are completed through nodes which are run by the Riksbank and other participants such as payment service providers.

A service provider can request e-kronor that are issued from the Riksbank in exchange for the user debiting their account in the Riksbank’s settlement system RIX.

The customer can then exchange money in their bank accounts for e-kronor, that they can use for transactions instead.

When a person uses e-kronor for a transaction, the service providers’ nodes verify that the e-krona can be traced back to the Riksbank. The e-krona is then registered as consumed and the transaction is accepted.


An image provided by the Riksbank shows how the e-krona could work.

What happens now?

Following on from the pilot, the Riksbank said they will continue to work on a digital currency that will be usable in everyday life.

Phase 2 will include working with potential distributors, developing offline functions and assessing scalability for retail payments. This phase is expected to last at least a year.

How likely is a digital currency actually to happen?

There is still a long way to go before a digital currency is a reality. Several huge questions remain. For example, there is currently no legislation within this area, and new legislation would be needed. User identity protection is also an important question, as every e-krona contains information about previous transactions and recipients.

As of today, there have been no decisions on whether an e-krona should be issued and what that would look like. The Riksbank are clear that this is technology that needs further investigations and the pilot is not the final solution that has been chosen as the digital currency.

Member comments

  1. Utterly pointless. Blockchain is a solution looking for a problem. Prepaid debit cards would allow people without bank accounts to use existing cashless payment systems, without creating another one.

    The difficulty of getting a PN is a separate issue and is a structural inequality in Sweden that should be fixed. But it’s too convenient for anti-immigration folks to use it as a way to make life difficult for non-Swedes.

    Strongly suspect this is all so the Riksbank can stay hip with the dudebros by using blockchain, yah

    1. I think the biggest point of using the blockchain here is to check whether ekrona that is being received was actually a valid token that was issued by the Riksbank and that it was acquired by the person before they send it off to somewhere else.

      At the moment banks do give us a notion of being cashless, but these banks are probably also working under the cover with the flow of actual cash (which again, is checked physically, whether they were printed by the Riksbank).

      I guess, as we do already have banks set up to handle our krona in digital form, we could expect the ekrona to replace what banks are currently doing under the hood with real krona bills?
      I think I’m trying to say, don’t expose this ekrona thing to the general public, just have the banks manage everything! And to the general public, keep life the way it is now?

    2. Thanks for your reply, Mark. As I finished reading, I wondered “how is this better than what already exists?” I don’t see the benefit for Sweden financially or to the Swedish economy. Agreed, re: structural inequality of obtaining a PN *and* agreed that as SD/anti-immigrant folks attempt to weaponize anything at their disposal (citizenship tests, for example) they seek to weaponize this, too.
      So, I don’t see this as easier/safer to manage than what already exists, I don’t see it improving the wealth of Swedes in general or the nation as a whole and I *do* see its potential to be weaponized by darker political/social forces in the country. *And* I have to wonder 1) who specifically is pushing for this and 2) how will they particularly benefit from it?

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MONEY

What to do if you can’t meet Tuesday’s Swedish tax declaration deadline

The deadline to submit your income tax declaration in Sweden falls on Tuesday May 2nd. Here's what to do if you haven't managed to get it together in time.

Published: 2 May 2023 11:38 CEST
What to do if you can't meet Tuesday's Swedish tax declaration deadline

When exactly is the Swedish tax deadline and what help can I have to meet it? 

The deadline falls on the stroke of midnight on Tuesday May 2nd, so you still have a few hours to get your declaration together.

Sweden may have relatively high taxes, but the Swedish Tax Agency seeks to make paying them as easy as possible.

If you have any questions, it is well worth ringing the helpline on 0771-567 567.

Unlike the helplines of the tax offices in most other countries, the helpline is well-staffed with informed people who go out of their way to help you. 

The agency also has a good quide in English on how to file your return. 

What happens if you miss the deadline? 

If you fail to submit your declaration by midnight, you are at risk of having to pay a fee of 1,250 kronor, but this won’t necessarily happen. There is an element of discretion, and if you filed your return at 0.15am on May 3rd, you may well be let off. 

In any case, before the charge is taken out of your tax account or skattekonto, you will first receive a note informing you of possible impending late charge, which you can then appeal. 

So if you fell ill on May 2nd, or the internet broke down at your apartment at 11.55pm, you can inform them when you receive this note and you may be able to avoid a fine.  

If in a further three months (August 2nd), you still haven’t submitted your tax declaration, you risk a second 1,250 kronor fine. Finally, after five months (October 2nd), you risk a third fine of 1,250 kronor. 

How to get an extension if you are self-employed 

You can extend the deadline until May 16th by logging into your page on the Tax Agency’s website or calling them on 0771 567 567 (or +46 8 564 851 60 from outside Sweden).

To find the extension form, go to the Mina Sidor page on your Tax Agency account, press the Skatter och Deklarationer link near the bottom, and then press the Anstånd med inkomstdeklarationen link and filling in the form. 

Jan Janowski, a declaration coordinator at the agency, said that the agency prefers for people to do this than to knowingly submit an incomplete or inaccurate declaration. 

“We want people to live their declaration in as complete a form as possible, but if you are still waiting for some supporting documents we would like people to apply for an extension.” 

If you have an accountant, they can apply for all of their clients’ income declarations to be delayed until June 15th in a measure called byråanstånd, intended to help them with the last minute rush to declare.

This, however, has to be done for all of their clients and isn’t something they can do for you just because you are late. 

Is it better to file an incomplete declaration than a late one? 

If you feel unable to file your declaration even on May 16th, what’s holding you back is likely to be something like declaring capital gains tax on share or property sales, or confusion over calculating one of Sweden’s many tax deductions, such as the ROT or RUT deductions for cleaning or home maintenance. 

If you are employed, the most important element of your tax declaration – your income from your job – will already be filled in on the paper or online form.

Declaring your main income from employment is just a question of checking that the details Skatteverket already has are correct and submitting a declaration either using Skatteverket’s app, or by sending a text message including your personal identity number and signature code to 71144 from within Sweden, or by calling 020 567 100 and following the instructions. 

If you are still wading through spreadsheets of share sales, but have no issues with the Tax Agency’s record of your income from employment, you can make the declaration but inform the agency that you may have other capital gains or other income to declare later on. 

If you do this, it’s good to be as transparent as possible with the agency about what information you are waiting for when you make your declaration.

To do this, find the andra information, or “other information” section in the declaration, and write down, in either English or Swedish, what information you are waiting for. 

You could write, for instance: “I sold an apartment in Florida in 2022 but have yet to receive details of the proceeds and am waiting for my accountants in the US to calculate the capital gains.” 

If you do this, you are much less likely to be fined if the Tax Agency later discovers any undeclared gains. 

How long do you have to make changes to your tax declaration? 

Until the Tax Agency makes a tax decision, normally in June, you can resubmit your tax declaration using the same form on the website you used to declare it the first time, and the agency will use the most up-to-date declaration when calculating your taxes. 

Even after it has made a tax decision for an income year, the agency is liberal about any voluntary changes made in future. 

Once a declaration has been made, you can still request changes to the final tax decision based on new information or corrections you have made for up to five years. 

For the first 12 months after the end of the taxation year (IE, until January 2024), the tax agency will never levy a so-called tax surcharge (skattetilläg), even if one of its officers discovers that someone has failed to declare, or falsely declared, some earnings or income in your return. 

After the first 12 months, if you bring undeclared income or falsely claimed tax breaks voluntarily to the tax agency’s attention before the agency discovers it, you are also likely to avoid a surcharge. 

What happens if the agency catches you not declaring income or falsely claiming rebates? 

If you are caught evading taxes or make a mistake, the penalty is set quite high. You have to pay the tax you should have paid, plus a 40 percent surcharge. 

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