Central Bank of Estonia conducts study on its own digital currency

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The next European Central Bank is working on its own digital currency.

Eesti Pank, the Central Bank of Estonia, has announced that it will carry out a study on the development of an infrastructure for digital currencies.

According to the announcement, Eesti Pank has joined forces with the technology companies SW7 Group and Guardtime for this purpose. Their common goal is to investigate whether a so-called Keyless Signature Infrastructure (KSI) based on block chain technology can serve as a platform for a dedicated digital currency. Estonia already uses the KSI block Bitcoin Pro chain technology for e-government services. In this context, the research project will also investigate new payment methods 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 purpose.

The duration of the research project is two years, divided into several phases. In the first phase, it will first of all examine what a scalable, practical and secure platform for digital currencies should look like, whereby the criteria of speed, security, data protection and resistance play a decisive role.

Rainer Olt, Director for Payment Systems at the Central Bank, explains:

„As a small central bank, Eesti Pank has to consider very carefully in which European projects it is heavily involved. In recent years, Estonia has gained unique know-how by operating a secure, privacy-conscious and efficient e-government system. The unique expertise of our country is a good foundation for launching a project with the technology companies SW7 and Guardtime to explore technical possibilities. The latter company is a long-term cooperation partner of Estonia and one of the best in the field of block chain technology“.
The Central Bank emphasises that it is constantly striving to optimise the financial infrastructure and payment system in order to keep pace with technological progress and meet the needs of the population as best as possible.

Estonia continues to rely on block-chain technology, although the e-government programme has recently come under criticism 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 altogether.

Translated with www.DeepL.com/Translator (free version)