Central banks are actively considering launching central bank digital currencies (CBDCs) in response to the declining use of cash. Until now, the pilot project of the e-Krona has only been modeled at the Riksbank. The project will now be expanded to include commercial banks in the next phase of the project.
The pilot project lasts a year with the aim of testing possible designs for a publicly used e-Krona in Sweden. The central bank said it could not yet confirm which banks or payment systems will help in the next round of testing. The aim was to evaluate how the e-Krona can be used for large commercial and small retail payments. The Bank for International Settlements previously said that central banks, representing one-fifth of the world's population, are likely to issue their own national digital currencies over the next three years.
Most central banks see CBDC only as a means to prevent competition with stablecoin and other cryptocurrencies and to keep the government's central role in the payment system. At this point, most central banks have only gotten to the CBDC survey. The People's Bank of China is the only major central bank to have tested its CBDCs on a large scale and is very close to releasing them to the general public. Earlier, the Bank of Japan announced that it plans to experiment with CBDC starting next year.