Estonia's Central Bank to Research if Blockchain Can Support a Digital Euro

Eesti Pank said the initiative will gauge the suitability of the KSI Blockchain, already used within the country's e-government system, in supporting a central bank digital currency.

Oct 5, 2020 at 10:11 a.m. UTC
Updated Sep 14, 2021 at 10:04 a.m. UTC

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.

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