Central banks are actively looking at launching central bank digital currencies (CBDCs) in response to a decline in the use of the cash they print and as a way of speeding up domestic and international payments. Up to now, the e-krona pilot has only been simulated within the Riksbank but will be broadened to include participants like commercial banks in the next phase of the project, the central bank announced, as reported by Reuters.
The e-krona pilot has been going for a year.
The pilot has been going for a year, with the aim of testing out possible designs for a publicly used e-krona in Sweden. The central bank said it could not yet confirm which banks or payment providers would assist in its next phase of testing but said the purpose was to evaluate how the e-krona could be used for both large commercial and small retail payments. Earlier, the Bank for International Settlements said central banks representing one-fifth of the world’s population are likely to issue their own national digital currencies in the next three years.
Central banks continue to explore CBDCs.
Most of the central banks only see CBDCs as a means of warding off competition from stablecoin and other cryptocurrencies and maintaining a central role for public authorities in the payment system. At the moment, most central banks have only got as far as researching CBDCs. As reported earlier, the island of Bahamas has successfully launched a CBDC. The People’s Bank of China is the only major central that has tested its CBDC on a major scale and is very close to issuing it to the general public. Earlier, the Bank of Japan announced that they plan to experiment with CBDC starting next year.