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Estonia Getting Ready to Learn Concepts of Central Bank Digital Currency (CBDC)

A research project has launched by Estonia to conduct a study on the technology favoring CBDC or Estonian digital money.

The move came after seeing the rapid development in the financial services and the emergence of technology which is noticeably changing consumers’ payment preferences. Also, Estonia is not in the temperament of losing the opportunities hovering in the digital money/cryptocurrency space.

In a press release published by the Estonian central bank, Eesti Pank, on Oct 2, mentions that for dedicated research into the deployment of Estonian central bank’s digital money (CBDC) Eesti Pank has collaborated with two technology firms in a multi-year teamwork process i.e., Guardtime Group and SW7 Group.

According to Guardtime, “Estonia is recognized as a world leader in eGovernment. It is the only country that has deployed blockchain at scale.”… “The implications of a CBDC deployed at scale are profound and we believe there is no better place in the world to do a public-private partnership around digital currency than Estonia.”

The Estonian bank believes that Estonia’s CBDC can offer new opportunities to individuals and companies to deposit or use money in a commercial bank account together with cash.

Meaning, Estonian CBDC would be similar to cash as “the central bank directly guarantees the value of the money.”

“The central bank’s digital money research project is the first practical example of Eesti Pank’s new strategic direction, within which the central bank seeks cooperation opportunities and research topics from the private sector that promote the development of Estonia’s financial and payment environment.”

Reportedly, the central bank alongside within the same project also working on a new payment solution that may offer “if eID and other Estonian e-government solutions were used”

As per the initial plan, Guardtime and SW7 going to devote two years on the research together with Esti Paank “to build a scalable, practical, and cryptographically secure platform to meet the central bank’s digital money requirements, while meeting the stringent requirements of speed, security, privacy, and resilience.”