The e-krona project’s CBDC pilot revealed interesting outcomes on payments recently, which the Riksbank compiled in a report, explaining all the challenges it faced and its potential as well.
The Central Bank of Sweden, Riksbank, has released a detailed report on the e-krona project. The CBDC pilot project yielded a few discoveries on offline CBDC payments, which featured in the report. This report, the final one in the series of e-krona reports, explored a different method of offline retail CBDC payments.
In an earlier phase, Riksbank used mobile phones to store offline transaction information. On the other hand, the current system uses a combination of a shadow wallet and a payment card. The project’s system design already listed these two factors.
Moreover, the exercise also explored a few use cases using the same design. Meanwhile, the payment card acted as a tracker for offline changes to account balances, as well as a payment instrument.
Regarding the use cases, the report stated, “Three different use cases were tested: funding and de-funding e-krona to the payment instrument, offline payment from card to payment terminal (PoS) and offline payment between two cards. In addition, there was a test of imposing limits on the balance and number of transactions on the payment instrument.”
Further, the central bank went on to describe the challenges it faced in the process. At the same time, it also listed the method of transfers between the online wallet and offline payment instruments. It also mentioned the procedure of offline payments to merchants, along with inter-user transactions as well.
The Riksbank explored the possibility of a central bank digital currency (CBDC) in 2017. In 2020, it finally started the current CBDC pilot project. Its ongoing research on the CBDC is a positive step for other global central banks to follow suit.
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