The Riksbank shared the results of the latest phase of the central bank digital currency (CBDC) pilot project, which focused on the system’s offline functionality. Further research has been put on hold pending the adoption of the digital krona (e-krona) on a legislative level.
The Riksbank, Sweden’s central bank, presented a report on the results of the fourth phase of the digital krona (e-krona) pilot project. The document describes in detail the functionality of offline CBDC payments and relevant problems that are yet to be solved.
The option of using other users’ mobile devices as infrastructure for making payments without access to the global network was considered. Each device is called a “shadow wallet,” an intermediary node between offline and online wallets.
Another option for offline payments is a stored value payment card, which allows local recording and tracking of the account balance. Besides, the data should be synchronized and updated when network access is available.
A total of four offline transaction scenarios were considered:
- account funding and de-funding;
- payment at a point of sale (POS);
- transfers between two users;
- limiting the balance and number of card transactions.
Account data should be stored directly on the phone or card. Both options are already included in the system design. However, researchers point to security and accounting issues that offline payments still need to fully address.
The report notes that a robust and proven infrastructure will be required to launch the system. The e-krona pilot project was deployed on the Corda DLT platform, which is provided by financial and technology consortium R3 and developer Ledger.
CBDC research in Sweden has been ongoing since 2020. At the current stage, further research is on hold until the e-krona is legally adopted.
