Sweden’s central bank is testing CBDC for private and international remittance payments
Sweden’s central bank, the Riksbank, is investigating together with the central banks of Israel and Norway and the Bank for International Settlements (BIS) the use of a digital central bank currency (CBDC) for instant retail and international remittance payments, according to for a September 28 release.
The collaboration between the central banks and BIS is entitled “Project Icebreaker”, which means that the participating banks connect their domestic proof-of-concept CBDC systems to Sweden’s e-krona platform.
The e-krona platform is a blockchain and distributed ledger technology (DLT)-powered platform developed in a test environment. In February 2022, e-krona completed the second phase of technical trials, which demonstrated the possibility that banks and other payment service providers could be integrated into the e-krona platform and how an e-krona can function as an offline CBDC.
The project entered Phase 3 and focuses on formulating the requirements for a possible e-krona based on technical tests and analyzes if a decision is made to issue it.
Meanwhile, in Project Icebreaker, the participating central banks are exploring the technical feasibility of linking together different domestic CBDC systems to facilitate instant CBDC payments at drastically lower costs than the current way of working. The current payment system means that payments are sent to several central banks before reaching the final recipient.
Project Icebreaker is the fourth cross-border CBDC project by BIS, the others being Project Dunbar, Project Jura and mBridge. Following the project, BIS announced the success of mBridge on 28 September, which involved the Hong Kong Monetary Authority (HKMA), the central banks of China, Thailand and the United Arab Emirates, and BIS facilitated more than $22 million in real cross-border payments.
Project Icebreaker will run until the end of 2022, and a final report to finalize the results will be made available in the first quarter of 2023, according to to the Riksbank.