The next European central bank is working on its own digital currency.
Eesti Pank, the central bank of Estonia, has announced that it will conduct a study on the development of an infrastructure for digital currencies
According to the relevant announcement , Eesti Pank has teamed up with the technology companies SW7 Group and Guardtime for this purpose. The common goal is to research whether a so-called keyless signature infrastructure (KSI) based on blockchain technology can serve as a platform for one’s own digital currency. Estonia is already using Bitcoin Lifestyle technology for electronic government services (e-government). In this context, the research project is also to investigate new payment channels that are opened up “through the use of electronic IDs and other e-government services”.
The project does not specify which specific technologies should be used for this.
The duration of the research project is two years and is divided into several phases. In the first phase, the aim is to examine what a scalable, practice-oriented and secure platform for digital currencies should look like, with the criteria of speed, security, data protection and resilience playing a decisive role.
Rainer Olt, Director of Payment Systems at the Central Bank, explains:
“As a small central bank, Eesti Pank has to carefully weigh up the European projects in which it is heavily involved. In recent years, Estonia has gained unique know-how through the operation of a secure, data protection-oriented and efficient e-government system. The unique specialist knowledge of our country is a good basic building block for starting a project with the technology companies SW7 and Guardtime in which we sound out technical possibilities. The latter company is a long-term cooperation partner of Estonia and one of the best in the field of blockchain technology. “
The central bank emphasizes that it continuously strives to optimize the financial infrastructure and the payment system in order to keep up with technological advances and to meet the needs of the population as best as possible.
Estonia continues to rely on blockchain technology, although the e-government program has recently come under fire for some fraudulent activities .
Christine Lagarde, head of the European Central Bank (ECB), made it clear last month that the eventual introduction of central bank digital currencies does not mean that fiat currencies will be abolished entirely.