The e-krona pilot project tested by the Sveriges Riksbank Central Bank

Swedish Central Bank Riksbank announced last week that it would begin testing for a digital currency based on blockchain – e-krona.

The Sveriges Riksbank e-krona pilot project is the latest attempt by the central bank (CBDC) digital currency. The representatives of the institution provided details regarding the technical aspects of the system.

Built by Accenture and based on R3 Corda, Riksbank’s digital currency processes will take place as a simulation until February 2021. The bank is willing to extend the project for another six years if necessary.

The pilot will not involve any bank or end users; everything will be simulated within the central bank’s closed network. Accenture is still preparing the final testing system, according to Riksbank’s press office.

This investigation into digital government money will “increase Riksbank’s knowledge about the CBDC,” the bank said in a report. But it will also improve Riksbank’s understanding of DLT and blockchain technology, two technical solutions the bank has hitherto considered too “immature” to use for the e-krona pilot.

The e-krona pilot project – Functionalities

In the simulated system, the Riksbank node will issue the e-krona to the participating nodes, the banks. Banks will then distribute digital cash to end users: consumers and merchants. Users will then keep e-krona in digital wallets – on smartphones, portable technologies, cards – that make “peer-to-peer payments as easy as texting,” according to the latest report.

The system will include some centralization features. Only Riksbank will have control over its private network and will be able to add new nodes of participants to that system.

The bank underlined that it will not yet commit to launch an e-krona in any form. This is “ultimately a political decision,” Riksbank said in the report. But the pilot throughout the year will illustrate how the DLT e-krona technical solution could work in a country where the use of cash decreases every day.