The e-krona pilot – test of technical solution for the e-krona
The Riksbank initiated a pilot project 2019 to develop a proposal for a technical solution for a central bank digital currency, an e-krona, that can work as a complement to cash. The aim of the pilot project is to show in a test environment how an e-krona could look, work and be used by the general public.
The main aim of the pilot project and the technical solution is to increase the Riksbank’s knowledge about a central bank-issued digital krona. There is currently no decision on issuing an e-krona, how an e-krona might be designed or what technology might be used.
The Riksbank is conducting the pilot project in partnership with the consulting company Accenture to construct a technical platform for the e-krona together. The project is working to create, in an isolated test environment, a digital krona that is simple and user-friendly and, at the same time, complies with strict requirements for security and performance. The work also includes comparing the solution tested in the pilot project with other possible solutions for an e-krona. The pilot is also conducting work to investigate the legal status and role of a possible e-krona.
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, as well as to execute and accept transactions. The user shall also be able to make payments via so-called “wearables”, such as smart watches and cards.
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
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.
Transactions within the network are made through nodes that are run by the Riksbank and selected participants. 1: The riksbank's node, 2: Notary node, 3: The participants’ nodes, 4: End-users.
The riksbank's node
The Riksbank creates and destroys e-kronor that are represented by tokens.
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.
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.