Posted 8 months ago | by Ben Armstrong
Estonian Central Bank May Launch Digital Currency
Many nations are joining China in developing a Central Bank Digital Currency (CBDC). At the beginning of October, Estonia's Central Bank announced the launch of its own digital currency research initiative.
This decision was made following other central banks’ activities in virtual currency, including the European Central Bank (ECB).
Eesti Pank has formed a strategic collaboration with SW7 Group and Guardtime technology companies for the research program, as reported. The bank seeks to decide whether a blockchain solution with keyless signature infrastructure (KSI) can work on its virtual currency platform.
An Estonian CBDC Wouldn't Change Much
KSI blockchain technology is also implemented in Estonian e-government programs. As part of the project, new payment solutions will be developed, aiming to make it possible through “using electronic IDs and other Estonian e-government solutions.”
According to the central bank, the project will not target any specific technology implementation.
The project will be multi-phase and the estimated development time will be approximately two years.
The first phase will explore how a scalable, functional and protected platform can be designed to meet virtual funds criteria. Pace, security, privacy, and stability also have to be tickled on the platform.
Rainer Olt, director of the bank’s Payment Systems Department, explained:
“As a small central bank, Eesti Pank carefully chooses which development projects of euro area central banks we can make a meaningful contribution to. Over the years, Estonia has developed unique know-how on how to maintain a secure, private and efficient e-government. Estonia's unique wealth of experience provides a good impetus to launch a project with technology companies SW7 and Guardtime to explore technological opportunities. The latter is Estonia's long-term cooperation partner in the field of the blockchain and a complete top in the world in its field.”
The bank has expressed its desire to improve the payment system so that they it is compatible with current technology and meets citizens expectations.
Estonia has shown huge interest in blockchain through several particular activities involving this technology, despite recent scams that are linked to its e-residency program.
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