The e-krona pilot – test of technical solution for the e-krona

The main purpose of the pilot project and technical solution was to increase the Riksbank’s knowledge about a central bank-issued digital krona. The pilot project has, in an isolated test environment, tried to create a digital krona that is simple and user-friendly and, at the same time, complies with stringent requirements regarding security and performance. The work has also included comparing the solution tested in the pilot project with other possible solutions for an e-krona.  The pilot has also investigated the legal status and role of a possible e-krona. The pilot project ended in 2023 and the focus of the Riksbank's work is now to follow the global development of digital currencies with a particular focus on the European Central Bank’s (ECB’s) work on a digital euro.

The e-krona pilot’s technical solution

E-krona pilot, Phase 1

The technical solution is based on Distribute Ledger Technology (DLT), a form of blockchain technology. The e-kronor in the tested solution are represented by digital units of value, known as tokens, in a distributed network based on a type of blockchain technology on the company R3’s Corda platform. The solution is based on it only being possible for e-kronor to be created and destroyed by the Riksbank - like physical cash. The e-kronor are distributed to Riksbank-approved participants in the e-krona network, such as banks, that run their own nodes with the possibility of ordering and distributing e-kronor to the public.

End users are able to obtain e-kronor by opening digital wallets with their participants, such as banks. The digital wallet is linked to a payment instrument, such as a mobile application, that the end user can use to exchange bank money in an account with the participant in the network into e-kronor and then make payments with e-kronor. 

The conceptual model and technical solution are explained in more detail below and in the report E-krona pilot, Phase 1.

E-krona pilot, Phase 2

The second stage of the e-krona pilot with continued tests of the conceptual distribution model and the tested solution. The main activities in the second stage were to test:

• How the technical solution could be integrated with potential distributors of e-kronor and existing POS terminals.
• How the technical solution could enable payments offline.
• Performance tests of the conceptual model and the technical solution.

Read more: E-krona pilot, Phase 2

E-krona pilot, Phase 3

Work on the third stage continued in 2022, in which the main activities were to:

• Examine what a collaborative model between the Riksbank and the private market could be designed as part of the conceptual model and technical solution tested in the pilot.
• Test the capabilities and any advantages and disadvantages of the token-based solution as regards the development of programmable payment services.

Read more: E-krona pilot, Stage 3

E-krona pilot, Phase 4

During 2023, the work focused on an in-depth analysis of how e-krona payments could be made even when a payment instrument is not connected to the central e-krona system.

• An alternative offline solution was developed, based on a card as a payment instrument, and with only the balance and transactions stored. This is in contrast to the solution in Phase 2, where e-kronor were copied to the payment instrument, which in that case was a mobile phone.
• The functions then tested were e-krona transfers to and from cards, payments to stores, transfers between end-users and synchronisation between offline and online systems. The tests aimed to assess the feasibility of building a functional, safe and credible offline e-krona solution.

Read more: E-krona pilot, Phase 4

Conceptual illustration of the architecture of the e-krona network

A conceptual illustration of the architecture of the e-krona network in the tested solution is presented below. 

The riksbank's node

The Riksbank creates and destroys e-kronor that are represented by tokens.

Notary node

A technical function operated by the Riksbank. It checks that a token has not been used before.

The participants’ nodes

The participants, for instance, banks and payment service providers, operate their own nodes and check the authenticity of the tokens.

End-users

Deposits/withdrawals are made with the aid of digital wallets, connected to e.g. a mobile app or a card.

E-krona video - test of technical solution for the e-krona

Short video on the e-krona pilot explaining the technical solution that has been tested to see if it is possible to develop a digital complement to cash. At yet no decision has been taken to issue an e-krona.