Estonia’s central bank tests if blockchain can support a digital euro.

Estonia's central bank is undertaking a "multi-year" research project that will investigate the suitability of a blockchain-based digital currency to work alongside cash.

According to a news release, Eesti Pank said the initiative would gauge the KSI Blockchain’s suitability, already “a core” part of Estonia’s e-government system’s infrastructure, in supporting a central bank digital currency (CBDC). The research would be carried out with assistance from Guardtime, an Estonian company that developed the KSI Blockchain, and The SW7 Group, London-based business development and investment firm with a focus on innovative technologies. 

 

The research will also look at new payment solutions. 

The research will further look at new payment solutions that might arise from using electronic identity and other Estonian e-government solutions, though it will be technology agnostic in its approach. The Estonian central bank said the research is being instigated as user habits are already changing regarding payments and assist research on a possible digital euro announced last week by the European Central Bank. The Europan country’s experience running a digital form of government “gives us good grounds for launching a project to explore the technological frontiers of digital money,” said Rainer Olt, the head of the central bank’s Payment and Settlement Systems Department.

 

European central bank gears to issue a digital euro. 

The European Central bank “should be prepared” to launch a digital currency, president Christine Lagarde said last week, adding that the public will be asked to weigh in on the issue. The central bank will carry out a series of experiments with a digital euro over the next six months and launch a three-month public consultation starting this time. The ECB said a decision on whether to move ahead with a virtual currency project is expected around mid-2021. The ECB president said that they should be prepared to issue a digital euro, should the need arise. 

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Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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