I will participate in a Riksbank panel in early December to discuss CBDC and the e-krona project.
The Economist reports about government initiatives aimed at using blockchain technology in the public sector.
- Possible uses include land registries, identity-management systems, health-care records, or elections.
- Proponents expect the technology to improve efficiency and transparency and foster trust.
- Adoption requires significant investments.
- According to a survey “nine in ten government organisations say they plan to invest in blockchain technology to help manage financial transactions, assets, contracts and regulatory compliance by next year.”
- Sweden tests a blockchain-based land registry; Dubai’s government wants to completely shift to blockchain technology by 2020; Estonia stores health records and protects its shared government systems using blockchain-like technolog; Georgia’s land registry uses blockchain technology and has processed 160,000 transactions; Ukraine wants to become “one of the world’s leading blockchain nations,” not least to build trust between government and citizens.
Sweden’s tabloid Aftonbladet (in English) about what happened on Friday, 17 February 2017 in Sweden (nothing extraordinary).
In the FT, Richard Milne reports about the Riksbank pondering to issue a digital currency.
There are considerable questions for Sweden’s central bank to answer about how a digital currency would work. Would individuals have an account at the Riksbank? Would transactions be traceable, unlike with cash? Would emoney earn interest?
Ms Skingsley said: “Personally I would like to design it in a way that is most like notes and coins.” That would mean no interest would be paid on it. But she added that the state had no interest in helping illegal activity, suggesting some form of traceability.
The Riksbank would also need to consider financial stability issues such as whether they would or should compete with commercial banks’ deposit base. Ms Skingsley said she was concerned that in times of financial instability citizens could transfer money to a state-backed electronic system, potentially increasing instability.
India follows suggestions to fight tax evasion by taking high denomination notes out of circulation … and introducing new ones. Until the end of the year, Indians may exchange the old banknotes against new ones, at banks or post offices, by identifying themselves. On his blog, J P Koning discusses earlier demonetization episodes in Iraq and Sweden.
India’s move does not exactly follow the well publicized suggestions currently debated. But it might work.
I agree with Rogoff’s general point that it makes sense to burden cash users with ever more work since this burden disproportionately falls on heavy users like criminals. But Rogoff hasn’t yet convinced me that the status quo policy of gradually increasing the workload involved in cash usage (via inflation) needs to be sped up by a sudden removal of every bill above the $10. After all, the Swedes are setting an example of how a policy of gradualism can be twinned with tax policy in order to get some of the very effects that Rogoff advocates, namely pulling people out of the underground economy into the legal economy.
Koning refers to Martin Enlund’s post on the Nordea blog; Enlund suggests that decreased cash demand in Sweden may partly be due to policy reforms that rendered tax evasion less attractive.
Figure from Enlund blog:
The Economist compares asylum processes in major destination countries.
An OECD report proposes measures to slow the decline in the performance of school children in Sweden. They include (pp. 8-9):
… setting clear and high expectations for all students, building on current curriculum goals with a focus on developing core skills and enhancing skills for the 21st century.…ensure a better disciplinary climate and teaching and learning approaches that respond to diverse student learning needs, including low and high performers.Improve the access of disadvantaged families to information about schools and support them in making informed choices. In addition, introduce controlled choice schemes that supplement parental choice to ensure a more diverse distribution of students in schools.
Swiss Journal of Economics and Statistics 149(2), June 2013, with Christoph Schaltegger. PDF.
In response to the rapid growth of public indebtedness during the 1990s, Switzerland enacted a constitutional budget restriction in 2003: the Swiss Debt Brake. Aimed at balancing the federal budget over the cycle the fiscal rule appears to have left its mark. At the debt brake’s tenth anniversary, Switzerland’s fiscal position has improved considerably. Several other countries have also implemented fiscal rules, but with mixed success. What lessons are there to be learned from these experiences?