Sweden's central bank, the Riksbank, has concluded its digital krona pilot project and released its final report, which primarily focuses on the offline functionality and user experience.
Sweden's central bank, the Riksbank, has concluded its digital krona pilot project and released its final report, which primarily focuses on the offline functionality and user experience. In its fourth and final report on the e-krona, the central bank explored an alternative model for offline retail transactions. The initial model stored offline transaction information on mobile phones.
The report examined four specific use cases: funding and defunding the payment instrument, offline payments at point-of-sale (POS) terminals using near-field communication, offline transfers between two cards, and imposing limitations on card balances and transaction numbers.
The central bank is now considering the implementation of a "shadow wallet" within the online system and a payment card, both of which were already part of the system's design. The payment card would serve as the payment instrument and keep track of offline changes to account balances.
Mobile phones were utilized for communication between cards and between cards and POS terminals. However, due to security concerns, mobile phones were not deemed secure components within the transaction process. The report highlighted that user-to-user payments required multiple steps to ensure security, leading to reduced user-friendliness. The current design did not allow for significant reduction in the number of steps.
Although the e-krona pilot project has concluded, the Riksbank expressed its commitment to continued research on CBDCs, should legislation be enacted to introduce such a digital currency in Sweden.
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