Eesti Pank, the central bank of Estonia, is undertaking a “multi-year” research project that will investigate the suitability of a blockchain-based digital currency to work alongside cash.
- In a news release Friday, Eesti Pank said the initiative will gauge the suitability of the KSI Blockchain, already "a core" part of the infrastructure of Estonia's e-government system, in supporting a central bank digital currency (CBDC).
- The research will be carried out with assistance from Guardtime, an Estonian company that developed the KSI Blockchain, and The SW7 Group, a London-based business development and investment firm with a focus on innovative technologies.
- The work will further look at new payment solutions that might arise from the use of electronic identity and other Estonian e-government solutions, though it will be technology agnostic in its approach.
- Eesti Pank said the research is being instigated as user habits are already changing regarding payments, and to assist research on a possible digital euro announced last week by the European Central Bank.
- Estonia's experience running a digital form of government "gives us good grounds for launching a project to explore the technological frontiers of digital money," said Rainer Olt, head of the central bank's Payment and Settlement Systems Department.
- Estonia joined the European Union in 2004 and adopted the euro at the start of 2011.