Sveriges Riksbank, the central bank of Sweden, will take the next step of its e-krona project with the help of two organizations in the financial sector. This decision marks a transition from initial internal testing with mock participants to cooperation with real external partners.

Riksbank will work with Handelsbanken and Tietoevry to test E-krona

The main task during the new pilot phase will be to test “the technical solution for e-krona” with the participation of real market entities. To do this, Riksbank invited Handelsbanken, one of the country’s leading banking institutions, and Tietoevry, a digital software and services company. In one ad released on Friday, the regulator noted:

The involvement of external actors as participants in the test environment will allow Riksbank to assess the integration between the participants’ existing systems and the technical platform for the e-krona pilot.

One of the elements that will be tested is the integration of the payment flows developed during the first year of the pilot with the internal systems of the new participants, explained Riksbank. The partners will simulate how banks could interact with the e-krona infrastructure, Tietoevry explained in a separate press release, adding:

Tietoevry will develop and test the interchangeability process between trade currency and e-kronor and analyze how this can be done safely and efficiently.

The Finland-based company also noted its “unique position in the Nordic financial ecosystem” thanks to a large customer base made up of banks and payment providers. Over 70% of all Nordic bank transfers go through its payment systems and fintech enables major mobile payment providers in Sweden, Norway and Finland.

Central Bank of Sweden to integrate electronic crown into existing banking infrastructure

“Our role in the Swedish payment infrastructure is well established and Tietoevry is a natural partner in exploring how to integrate a digital currency into the existing banking infrastructure,” said Christian Segersven, Head of Financial Services Solutions and Software Development . “We look forward to supporting this journey towards an inclusive digital currency that will open up to innovative and secure services,” he added.

Svenska Handelsbanken, the other partner to get involved in the second stage of the e-krona pilot project, is one of the largest banks in Sweden, with more than 400 branches across the country. Founded in 1871, it is also the oldest company listed on the Swedish stock exchange. Over the past two decades, Handelsbanken has expanded its activities to other countries in the region as well as to the Netherlands and the UK, where it has more than 200 branches.

Sweden’s plan to issue a central bank digital currency (CBDC) dates back to a few years ago. Towards the end of 2020, the Stockholm government began exploring the feasibility of digitizing the national fiat, the Swedish krona. Arguably, the Scandinavian country has already built the most cashless society in the world. The review is expected to be completed within two years of launch.

Last month, Riksbank announced the completion of the first phase of the study and released a report highlighting the continued decline in cash use in the country. The Swedish central bank stressed the need to continue the project and facilitate the participation of market players who are expected to participate in the tests now and join the e-krona network in the future.

What do you think of Riksbank’s plan to digitize the Swedish krona? Let us know in the comments section below.

Image credits: Shutterstock, Pixabay, Wiki Commons