Ethereum Blockchain to Be Basis for Norwegian CBDC

The central bank of Norway has released open source code based on Ethereum for the country’s central bank digital currency (CBDC) sandbox.

Ethereum Blockchain to Be Basis for Norwegian CBDC

Representatives of the blockchain company Nahmii, the Norges Bank’s official partner in developing the state digital currency concept, announced the launch of a public Ethereum-based technology sandbox for developing DSP, the Norwegian CBDC.

The source code for Norway’s CBDC sandbox is now publicly available on GitHub. The digital currency development environment is designed to create an interface for interacting with the test network, including features such as minting, burning, and transferring ERC-20 tokens.

Yet only selected users will be able to participate in the DSP development, as “this version of the code does not support MetaMask, and transactions on the test network are therefore private,” according to the company’s blog.

The main purpose of the sandbox is to develop a secure, efficient, and attractive payment system DSP for the Norwegian population. The Norges Bank said the Ethereum blockchain will provide the “core infrastructure” for CBDC issuance, distribution, and destruction. At this stage, the development will be used to test a number of important features for DSP. 

Further development of Norway’s CBDC in collaboration with Nahmii will include more sophisticated uses of digital currency, such as making payments, creating security tokens, and bridging networks. The second phase of DSP development, scheduled to begin by the middle of this month, will also provide access to work with smart contracts to create the user interface of the future CBDC. 

More than half of the world’s central banks are studying and developing public digital currencies. For example, analysts at the European Central Bank (ECB) consider the CBDC the only option for transforming the traditional monetary system and insist it’s best suited for cross-border payments. Meanwhile, major international financial institutions are urging central banks to design their CBDCs in advance with the possibility of future interoperability. And over half of crypto investors surveyed by The Economist expect CBDCs to replace physical currency in their country.

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