Sweden central bank partners with local bank for CBDC trial

Getting your Trinity Audio player ready...

Sweden is marching on with its development of a central bank digital currency (CBDC). In its latest stride, the country’s central bank has partnered with a private local bank to trial the CBDC in a real-world setting, for both commercial and retail use.

The country’s apex bank, known as the Riksbank, has been a global leader in CBDC exploration and development. It’s the only central bank in the world, aside from the People’s Bank of China, that has progressed from CBDC research to development and trial. The Bahamas, on the other hand, is the only country that has officially launched its own CBDC, the Sand Dollar.

The Riksbank has been one of the most prolific CBDC developers in the world. In April, it announced that after months of internal testing, it was looking to onboard commercial lenders to the project for further testing of the e-krona. Handelsbanken, which is one of the oldest and largest banks in the Nordic country, has emerged as the first participant in the CBDC trial.

As per a Reuters report, the bank stated, “The e-krona pilot is therefore moving on from only having simulated participants to cooperation with external participants in the test environment.”

According to a survey by the Bank for International Settlements, 20% of all central banks will issue a CBDC in the next three years. A separate study by audit firm PwC placed the Bahamas as the top country in CBDC development. Cambodia came in second, with China getting the third spot. Sweden ranked eighth, below such countries as Ecuador and Uruguay.

On its part, Handelsbanken expressed its excitement at what the partnership will bring forth in the CBDC journey.

In its statement, the bank said, “For Handelsbanken, the project means the opportunity to participate in what may be among the first digital central bank-issued money in the world to be available to the public.”

Other central banks that have made recent moves on the CBDC front include South Africa, the U.S. Federal Reserve, South Korea, Indonesia and Norway, which is exploring the possible issuance of its CBDC on the BSV blockchain.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

See also: CoinGeek Live panel, The Future of Banking, Financial Products & Blockchain