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- Sweden has made a major stride forward by entering a testing phase for its “e-krona”.
- Riksbank has apparently come out with its central bank digital currencies and put it through a testing phase to try and explore use cases where the public can use “e-krona”.
- Central Bank Digital Currencies, like other digital assets like Bitcoin work based on distributed ledger technology, or blockchain technology.
Amongst the number of central banks that have been clambering for building and testing central bank digital currencies (CBDCs), Sweden has made a major stride forward by entering a testing phase for their “e-krona”.
Sweden’s central bank, Sveriges Riksbank has taken the country one more step closer to getting the world’s first digital currency on the market with a partnership with strategy consulting and technological operations giant, Accenture.
Sveriges Riksbank was also one of the few banks which formed a consortium with the BIS (Bank of International Settlements) along with the central banks of Switzerland, England, Japan, Canada and the European Central bank to investigate and look into the potential of CBDCs within their respective economies.
Riksbank has apparently come out with its central bank digital currencies and put it through a testing phase to try and explore use cases where the public can use “e-krona”.
The digital currency will be used to enable financial services normally provided by central banks, including deposit and withdrawal services and transactions through a digital wallet.
The testing phase will involve “simulated users” holding e-kronor in digital wallets, and trying out its viability in an “isolated testing environment”. The testing is expected to run till January 2021, for a complete understanding of technology and to cover all aspects of testing.
The digital wallet will also be compatible with use with wearable devices like smartwatches and will also have a dedicated card that gives access to the digital wallet. This testing phase will allow Riksbank to understand the feasibility of actually issuing a CBDC and improve their understanding of the potential behind such digital currencies.
Central Bank Digital Currencies, like other digital assets like Bitcoin work based on distributed ledger technology, or blockchain technology. As it is more popularly known, where transactional data is stored on a distributed network in order to maintain ledger integrity, and increase security and transparency.
But unlike Bitcoin and other cryptocurrencies whose governance is decentralized amongst the public using a P2P network, CBDCs are governed by the central bank and is simply an extension of the fiat currency issued by the central bank in a digital format.
Many central banks across the globe have been peering into central bank digital currencies trying to understand the benefits and potential behind a digital currency format.
Most expect the first CBDC to make it to market circulation will truly have a disruptive effect on the global economy and Sweden’s interest in pushing CBDC research further is definitely a good indicator to taking the value of the kronor higher.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
