Swedish Central Bank Working With Handelsbanken For Digital Coin Trial

Swedish Central Bank Working With Handelsbanken For Digital Coin Trial

May 28, 2021 at 10:45PM

Sweden’s central bank Riksbank said on Friday (May 28) that it is collaborating with lender Handelsbanken to test the digital currency e-krona, Reuters reported.

The collaboration will test how the e-krona will be able to handle payments in an everyday setting, the bank said per the report.

Central banks worldwide are examining the use of digital currencies (CBDCs) as cryptocurrencies enter the mainstream and the use of cash continues to decline. Further, there’s been an increased need for real-time cross-border payments.

“The e-krona pilot is therefore moving on from only having simulated participants to cooperation with external participants in the test environment,” the Riksbank said in a statement, per Reuters.

The Riksbank said in April that it wanted to include commercial banks in its next phase of testing to determine how the e-krona could be used for different payment types.

“For Handelsbanken, the project means the opportunity to participate in what may be among the first digital central bank-issued money in the world to be available to the public,” Handelsbanken said in a statement, Reuters reported.

So far, only the Bahamas has launched a CBDC. Sweden and China are the only others that started trialing eCurrency.

Last month, Sweden’s central bank said that a possible eCurrency needed further testing before rolling out. The initial phase of its pilot two years ago resulted in an e-krona network that simulated and tested the CBDC in an isolated environment.

“The solution tested in phase one of the e-krona pilot has met the performance requirements made in the public procurement. But this has taken place in a limited test environment and the new technology’s capacity to manage retail payments on a large scale needs to be investigated and tested further,” the bank said.