Estonia's Central Bank to Research if Blockchain Can Support a Digital Euro

Oct 5, 2020 at 10:11 UTCUpdated Oct 5, 2020 at 13:40 UTC.Eesti Pank, the central bank of Estonia, is undertaking a "Multi-year" research project that will investigate the suitability of a blockchain-based digital currency to work alongside cash.

In a news release Friday, Eesti Pank said the initiative will gauge the suitability of the KSI Blockchain, already "a core" part of the infrastructure of Estonia's e-government system, in supporting a central bank digital currency.

The research will be carried out with assistance from Guardtime, an Estonian company that developed the KSI Blockchain, and The SW7 Group, a London-based business development and investment firm with a focus on innovative technologies.

The work will further look at new payment solutions that might arise from the use of electronic identity and other Estonian e-government solutions, though it will be technology agnostic in its approach.

Eesti Pank said the research is being instigated as user habits are already changing regarding payments, and to assist research on a possible digital euro announced last week by the European Central Bank.Estonia's experience running a digital form of government "Gives us good grounds for launching a project to explore the technological frontiers of digital money," said Rainer Olt, head of the central bank's Payment and Settlement Systems Department.

Estonia joined the European Union in 2004 and adopted the euro at the start of 2011.Disclosure.