The central bank of Sweden has completed the first stage of testing the state cryptocurrency – the digital krona. This year, the second stage of testing will be launched in cooperation with commercial banks.
According to Reuters, citing a report from the Central Bank of Sweden, as part of the first stage of the pilot project of the digital crown, the payment system in the state cryptocurrency was modeled only within the infrastructure of the Central Bank. However, the next phase of the project involves the inclusion of commercial banks in testing to explore the possibilities of commercial and retail payments.
“The technology opens up new possibilities … but has not yet been used when it comes to processing retail payments at scale and with the required level of security,” the Swedish Central Bank said in a statement attached to the e-krona pilot test report.
In February last year, the Swedish Central Bank began testing Europe’s first state-owned cryptocurrency. The aim of the initiative was to show that citizens can benefit from the use of the e-krona.
The Central Bank of Sweden said it could not yet confirm which banks or payment systems will participate in the next stage of testing. However, the aim of further research is to assess how e-krone can be used for both large commercial and small retail payments.
Many Central Banks are exploring the possibility of issuing government cryptocurrencies. However, so far only the Central Bank of the Bahamas has launched the Sand Dollar, and Sweden and China were among the first countries to launch testing of their state-owned cryptocurrencies. As a reminder, last year, the Swedish Central Bank examined the potential of four different government cryptocurrency models for the local market and published the results of the study.