Sweden’s Riksbank Concludes CBDC Report, Focuses on Offline Payments
Sweden’s central bank, Riksbank, has recently published its final report on the development of its central bank digital currency (CBDC), the e-Krona. The report specifically focuses on offline payments and explores the possibility of creating a secure and usable offline digital currency. The findings suggest that it is indeed feasible to develop such a currency, but it requires the establishment of appropriate boundaries and regulatory frameworks. Riksbank highlights the importance of collaboration in terms of technology, regulations, and processes to ensure the security and functionality of an offline solution.
Testing Different Use Cases
Riksbank conducted extensive research during the development of its CBDC. The bank tested three different use cases:
- Funding and de-funding e-krona to the payment instrument.
- Offline payment from card to payment terminal (PoS).
- Offline payment between two cards.
Synchronization is Key for Offline Payments
In order to ensure successful offline payments, Riksbank emphasizes the importance of synchronization. This means that the balance in the offline wallet should correspond to the e-Krona reserved in the shadow wallet in the online system. However, findings reveal that problems may arise if users do not synchronize their payments in the correct order. Lack of liquidity in some shadow wallets can lead to complications.
CBDCs as Investments
Riksbank views CBDCs as investments aimed at protecting the current fiat monetary system. A central banker from Sweden argues that cash will soon become obsolete and highlights the need for central banks to develop CBDCs to address public demand and keep up with advancements in the modern world.
In a speech at the European Central Bank’s Forum on Central Banking, Cecilia Skingsley, the former first deputy governor of Riksbank, emphasized the necessity of CBDC development for central banks to meet public demand and adapt to evolving global trends.
Riksbank Governor’s Stance on Bitcoin
Sweden’s Central Bank Governor, Erik Thedeen, recently expressed caution regarding Bitcoin integration into the country’s financial system. He cited the speculative nature of Bitcoin and the potential risks of investor losses. Thedeen believes that Bitcoin has no place in Sweden’s financial system and advocates for minimal integration.
As the central bank overseeing Sweden’s monetary policy and currency issuance, Riksbank shares Thedeen’s cautious approach towards Bitcoin integration.
Possible Losses in Sweden’s Financial System
Thedeen’s warning about Bitcoin integration comes at a time when the cryptocurrency is reaching new record highs. The governor fears that crypto users within Sweden’s financial system may face significant losses due to the volatile nature of Bitcoin.
Hot Take: Riksbank Concludes Successful CBDC Project with Focus on Offline Payments
Sweden’s Riksbank has concluded its CBDC project with a final report emphasizing the feasibility of developing a secure and usable offline digital currency. By testing different use cases and highlighting synchronization as a key factor for successful offline payments, Riksbank has paved the way for future advancements in CBDC technology. Additionally, Riksbank Governor Erik Thedeen’s cautionary stance on Bitcoin integration reflects a conservative approach to safeguarding Sweden’s financial system from potential risks associated with cryptocurrencies.
Sources:
European Central Bank,
Cryptonews
By
By
By
By