Riksbank completes first phase of digital krona pilot

The technology behind national digital currencies (CBDCs) requires further work, particularly in terms of scalability. These conclusions are contained in the Riksbank’s report on the results of the first phase of the digital krona testing.

The regulator modelled the core aspects of a potential CBDC system, including liquidity distribution through assumed intermediaries using the RIX settlement system. As part of the tests, Riksbank also created end users and payment applications. The project is based on the R3 Corda blockchain.

“The solution tested in the first phase of the digital krona meets the performance requirements described in the technical specification. The results were obtained in a limited test environment. The capability of the technology to handle retail payments at large scale requires further research and testing,” the report said.

The central bank also noted some privacy issues. The regulator stressed that in accordance with banking secrecy laws, the information contained in the transaction must be protected. Disclosure of personal data is deemed unacceptable.

The head of the digital krona project, Mitra Sundberg, noted the need to create a new legal framework for the use of CBDC. He said that testing could continue until 2026, given the array of problems that must be solved.

Riksbank will extend its agreement with consulting firm Accenture, acting as the project’s technical adviser.

Phase two of the tests will focus on potential providers of the digital krona, its storage methods and effectiveness in retail payments. Researchers will also test the CBDC’s autonomous functionality and integration with point-of-sale terminals.

Back in 2016, plans to launch Sweden’s digital currency first emerged.

In February 2020, the central bank, together with consulting firm Accenture, began testing the e-krona. The partnership agreement was signed in 2019.

In December 2020 ForkLog reported that the Swedish government would decide on issuing a CBDC within two years.

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e Krona Pilot Phase 1 by ForkLog on Scribd