The Bank of Estonia (Eesti Pank) is launching a multi-year research project to assess the suitability of its e-Government technology in operating a central bank digital currency.
The initiative, in collaboration with the technology companies Guardtime, the long-term blockchain partner of the Estonian government, and The SW7 Group, will focus on a solution based on the KSI Blockchain, a core technology of e-government in Estonia.
The project will also examine new payment solutions that could be made possible by using identity and other Estonian e-government offerings, although it will stop short of making choices around the use of specific individual technologies.
From a wider perspective, the project is firstly a response to a report from the European Central Bank (ECB) earlier this month, assessing the reasons for and effects of a ‘digital euro.’ As the ECB assesses it, it would complement the current offering of cash and wholesale central bank deposits. Secondly, it is being seen as the first practical example of Eesti Pank looking to cooperate with the private sector to help develop financial and payments markets in Estonia.