Riksbank to welcome digital currency (CBDC)?

December 14, 2020

KaylaTurner
36
Since time immemorial, different methods of exchange has existed in the world. With the establishment of banking and financial institutions, new methods came to picture. In banking, coins, currency notes, debit cards, credit cards, cheques are present. With advent of software technology, digital currency came into existence. In the last decade, digital currency has flourished widely throughout the world. Cryptocurrency like Bitcoin has a lot of demand in the market. Due to the demand, the price of cryptocurrency is also increasing day by day. However, all this comes with a price. With the increased usage of digital currency, financial crimes are also increasing. Money launders and criminals are using this to their benefit. So, there are talks going on for the introduction of a new payment system. That is central bank digital currency (CBDC). It is a digital currency, issued by the central bank of the country.
 

CBDC

 
The proposal of central bank digital currency was present since long time ago. But, no country has shown its interest in it until recently. Now the central banks around the world are considering this option due to the decreased use of cash. However, the major breakthrough came when Facebook declared its own digital currency “Libra”. Recently, few countries have started their work for the development of digital currency. In some countries, it is a proposed idea. In few countries, the development of digital is in progression. Due to the pandemic, many countries are taking digital currency into consideration.
 

Riksbank’s e-krona project

 
Sveriges Riksbank is the central bank of Sweden. It is one of the oldest bank in the world. The usage of cash has started decreasing since 2004 in Sweden. As per a latest survey, cash usage is only 13% in household payments. Due to this, the central bank started exploring the option of digital currency in 2016.
 
In 2017, the proposal for e-Krona project started. The bank started developing the digital currency. The project has a three-phase action plan. Currently, the project is in its third stage. The bank has partnered with Accenture for this project. The company is developing deposit and transfer option of the digital currency. The bank has collaborated with R3 ledger firm. It will be using the firm’s platform “Corda” for the testing of the digital currency. The pilot batch will be ending by February 2021.
 

Pilot batch development

 
The digital currency ‘e-Krona’ was recently rolled out to its pilot users. The pilot users are the trusted financial intermediaries. The distribution of e-Krona to the user’s digital wallets is through participant nodes. The debit and credit transactions will happen through participant nodes. The development of a central database to keep e-Krona accounts also existed.
 

Conclusion

 
It would be interesting to see the success of e-Krona. If this becomes successful, it will the first accepted central bank digital currency. Many central banks around the world are trying to create their digital currency. The future for digital currency seems to be bright with the development of e-Krona.
Kayla Turner
Kayla Turner

Kayla is an adept article writer with vast hands-on experience in cryptocurrency and technology. She is outgoing and always looking for new challenges to conquer. Over the years, she has gain massive traction online for writing stellar content on cryptocurrency and blockchain technology in a crispy and easy to understand style. When she is not writing for the web, she loves spending quality time with friends, colleagues, and her family indoors and outdoors. Be sure to check out his profile online for more invigorating articles.

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