The Swedish Central Bank plans to test the use of the e-Crown digital currency in the real world and incorporate commercial banks into the project.
Central banks around the world are planning to launch a central bank digital currency (CBDC) to cope with the decline in cash usage and speed up domestic and international payment methods.
The central bank said that so far, the e-Crown pilot project has only been simulated in Riksbank. In the next phase, the project will be expanded to include participants such as commercial banks.
The Riksbank stated: “This technology offers new possibilities, but it has not been tested in terms of processing retail payments and the required level of security.”
The pilot project lasts for one year and aims to test possible ways to openly use the electronic crown in Sweden.
Riksbank has not been able to determine which banks or payment service providers will help in the next phase of testing, but the purpose is to evaluate how the e-Crown can be used for large-scale businesses and small-scale payments.
A survey conducted by the Bank for International Settlements in January found that central banks that “cover” one-fifth of the world’s population are likely to begin issuing their own digital currencies within the next three years. Many central banks see CBDC as a means to prevent cryptocurrency competition and maintain the central role of public institutions in the payment system.
So far, most central banks have only been involved in CBDC research. Only the Bahamas introduced CBDC, and Sweden and China started testing it.