The payment market has developed rapidly in recent years and cashless means of payment are growing in popularity in all age groups, while fewer and fewer people use cash. In 2019, the Riksbank thus began an investigation into a digital krona, the e-krona. The e-krona is intended to be a digital central bank money that complements today’s cash.
At the end of 2020, a pilot project was started where the consulting company Accenture was awarded the task of developing a first test environment. The goal of the pilot project was to create an e-crown in an isolated environment to test user-friendliness, security and performance. In a press release, the Riksbank is now releasing the report “e-krona pilot stage 1” with the first results.
The technology is based on Distributed Ledger Technology (DLT), better known as blockchain technology and the test environment has simulated participants, liquidity supply and end users. The pilot project uses a token-based e-krona. A token can only be used once, and is thus consumed after use. When switching back, a new token is generated. All e-kronor are traceable to the Riksbank, which is the sole issuer and guarantor of the value.
To be able to use the e-krona, a connection to the e-krona network is required, which in the test is based on the company R3’s blockchain platform Corda. The Riksbank owns the network and decides who can join and the network is not connected to existing payment services. No new e-kronor is created in the network either, but it is supplied by the Riksbank’s RIX system. The transactions then take place through nodes.
The biggest problem the pilot project encountered is related to the fact that the technology in this context is new and untested. The token technology used can be extremely performance demanding in long transactions or mass payments where tokens must be verified far back or several new tokens must be created. It has also not been investigated whether or how the solution would work offline yet. There are also legal question marks regarding confidentiality and personal data.
“The focus for stage 2 will be to include potential distributors of e-crowns as participants in the network to test how an integration with their internal systems can work with the e-crown network. The solution’s possibilities for different ways to store tokens and their keys and its possibilities to offline payments will also be investigated in more detail, as well as further tests of the solution’s performance for mass payments
will be given priority. “
The Riksbank has thus decided to extend the agreement with Accenture for another year to continue evaluating and testing the e-krona. At present, there are no political decisions regarding the e-krona and there is a long time left before such a solution sees the light of day.