The Swedish central bank, Riksbank, has announced it has begun the testing of its central bank digital currency (CBDC) e-Krona.
The testing program for e-korona is to last for one year, February 2020, to February 2021. Riksbank noted this initiative aims to analyze whether Sweden, can effectively implement and administer a central bank digital currency.
Experts have also stated that if the blockchain-powered currency initiative becomes successful. It will drive regular payments and banking activities throughout the country.
The bank additionally emphasizes that no decision has been taken to proceed with a CBDC, and the project is on trial and intended as a learning experience.
e-Krona developed by Accenture
The e-Krona project is being developed by Accenture, a consultancy firm. And will be running preliminary tests, in a sandboxed testnet.
Accenture reportedly won the contract to develop the e-Krona in December 2019. Its project would require test users will store e-Krona in a digital wallet, which would invariably enable them to perform transactions. Additionally, there will be solutions for smartwatches and cards.
However, before a wallet can be used, it has to be activated by the user connected to the distributed ledger technology (DLT) network, mainly banks. Once activated, the e-Kronor can be used for retail payments, person to person payments, or transfers to and from bank accounts.
Digital savvy Sweden
Sweden has reportedly been a crypto-friendly country. And recently has recorded less cash transaction, embracing being a cashless society.
Notably, over 50 percent of Sweden’s banks do not keep cash physically in vaults or such. However, most payments happen with credit/debit cards or mobile payment apps, with money only accounting for 20 percent of merchant transactions.
Also, notably, Sweden is the second country after the Bahamas to unveil an attempt at a working national cryptocurrency. The Bahamas unveiled a CBDC pilot program in December 2019 and plans a full rollout sometime in 2020.
According to experts, Sweden’s citizens already make 80 percent of their payments in other means rather than cash. Also, of the Swedish GDP, only 1 percent exists in the form of physical cash notes. “CBDC should be easy for Swedish citizens to adopt,” a crypto expert noted.
Also, countries such as Japan, China, Brazil, the Bahamas are planning to launch their national digital currency soon.