Sweden’s central bank starts testing its digital currency e-krona

In a press release issued yesterday, Sveriges Riksbank, the central bank of Sweden, announced it has begun testing its digital currency e-krona. The e-krona, meant to be a complement to cash, will allow users to make payments, deposits, and withdrawals through a mobile app. It will involve a two-tier process whereby the central bank will first issue e-krona to participants such as banks, and then participants will distribute the digital currency to end-users.

The central bank is working with consulting giant Accenture on the pilot project, which is built using R3’s Corda network. The project will run until the end of February 2021 with the option to extend further to develop the solution.

Why it matters:

• It goes without saying at this point that central bank digital currency (CBDC) projects are heating up. Announcements of such projects have exploded since the launch of Libra with some explicitly stating that Libra catalyzed them to move.
• Sweden now joins the race to launch the world’s first CBDC. China’s CBDC dubbed “DCEP” is set to launch sometime early this year.