Yesterday, Sweden’s central bank, the Riksbank, published a report on the second phase of its retail central bank digital currency (CBDC) pilot. It found that it could successfully integrate with commercial banking partners for distributing the e-krona. The central bank has some reservations about the DLT technology used, although the identified issues appear addressable and might provide insight for CBDC tests performed elsewhere.
Distribution of the e-krona is designed to be via commercial banks in a two-tier system. The central bank integrated the CBDC network with the legacy systems of consumer bank Handelsbanken and banking IT provider Tietoevry. The work demonstrated how the token-based e-krona can exist on a separate parallel DLT network but still integrate with the banking systems.
Riksbank explored two wallet options, a centralized one hosted by banks and a user-hosted wallet that worked more similarly to cash. One of the challenges with user wallets is that their identity is often a string of incomprehensible text such as “0x629a673a8242c2ac4b7b8c5d87”. Given this makes it tricky to send payments to another person, the central bank created human-readable aliases for the wallet addresses, using a centralized solution.
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