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A proposal for a Smooth Transition from CBDC to Sovereign Money

Critics claim that the introduction of CBDC for general use like the E-krona and even more a complete transition to a Sovereign Money system, will induce financial instability or even a finance crash. And indeed there are risk and problems that need to be cared for. But there is a way to do it.

Lars Alaeus, chair of Positiva Pengar, shows how introduction of the E-krona can be done in a completely smooth way with no financial disturbances. Two new tools for the Riksbank, necessary to achieve this are presented; the “E-conversion credit” and the creation of new money as citizens dividend (or to the state budget).

Even though the E-krona, introduced in this way, will greatly improve the monetary system by itself, a further process, also presented, is needed to neutralize all the negative effects of the current fractional reserve system and to transform the monetary system to a complete Sovereign Money system..

This further process starts with an ‘overnight switch’ which in reality is only the point in time where new laws and regulations comes in place. There are no mandatory switching of money to other accounts over this night. The night is followed by a long period in time (~30 years) where debts and financial bubbles shrinks under full control of the Riksbank. The overnight switch and the following 30-year period will be smooth and include no disturbance in the monetary system and will gradually enhance the stability of the financial system.

1 Comment

  1. 16 Lars Aleus

    Implementation of the transition is well illustrated and explained. But, as with the previous video, it seems apparent that the presenter has never considered what happens to money during its multiple decades in circulation, regardless of the money’s origins. It is full speed ahead based on simplistic assumptions. That these assumptions are widely shared by the sovereign money reform movement does not make them true. It only proves that no one in this movement considers what happens to money during its multiple decades in circulation.

    I recently had a month of email debate with Lino Zeddies, of the IIMR and author of a featured article on sovereign money. It was he who alerted me to this conference. I have heard all the arguments he had to offer in support of sovereign money, none of which were new to me. In the article linked to below, I demonstrate with verified facts and simple logic how each one is based on a fallacy, the most fundamentally wrong one being the idea that sovereign money is “positive” and “debt-free”.

    My essays page at contains several more critiques of the sovereign money movement’s ideas.

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