Sweden has beaten all other major economies to the Central Bank Digital Currency (CBDC) punch, with testing of the e-krona underway.

Sweden’s central bank, Riksbank, is the world’s oldest central bank.

It has launched a one-year pilot of a CBDC for the country. The aim is to test the viability of a blockchain-based, centrally-issued national currency to replace its existing payments networks.

Sweden becomes the first major currency to launch a trial of a CBDC and second behind only The Bahamas, which launched the Sand Dollar trial phase late last year.

China has been toying with the idea of launching a CBDC for a number of months, though progress appears to have stalled.

If the trial proves successful, the e-krona would be released publicly, intended to replace all banking activities in the country.

“The aim of the project is to show how an e-krona could be used by the general public,” the Riksbank said in a statement. According to the central bank, Sweden is virtually cashless, with only 1% of all transactions involving banknotes.

The move, following the ECB’s decision to begin exploring a CBDC in the wake of the Libra threat, could allow residents to interact directly with the central bank.

Last April, Riksbank released a statement arguing that the “… general public no longer having access to any form of central bank money can make it more difficult for the Riksbank to promote a safe and efficient payment system.”

Commercial banks may well be marginalized in the Nordic country if the e-krona trial results in its formal release to the public.

The trial is expected to run to February 2021.

The post Sweden Takes First Bite of the CBDC Apple appeared first on Crypto Briefing.

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