September 26, 2022

The Central Bank of Norway launched a "sandbox" for testing the state cryptocurrency

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The Central Bank of Norway launched a "sandbox" for testing the state cryptocurrency

Testing will “evaluate varioustechnologies and related economic and regulatory conditions”. Norges Bank will also determine how the CBDC will help ensure the stability of the Norwegian krone and the financial system as a whole.

The Norwegian Central Bank intends to determine whether the state cryptocurrency will ensure the safety, efficiency and attractiveness of the Norwegian kroner payment system for the population of the country.

“Now cash plays an important role innational payment system and contribute to the competition of payment solutions, but their use is declining. This can lead to the fact that they will no longer perform their functions as before. The digital crown can complement cash, provide competition. It will allow maintaining national control over the payment system, ensuring the former attractiveness and security of payments in Norwegian kroner, while not depending on foreign infrastructure providers, including cryptocurrencies and stablecoins,” the Norwegian Central Bank said in a statement.

Testing can be done by differentfinancial institutions and companies. In addition, it is planned to arrange various "hackathons" so that anyone can get acquainted with the digital crown. Testing is expected to be completed by summer 2023.

Interestingly, during the first stagetesting CBDC will be built on the basis of the Ethereum network, and the digital crowns themselves will be issued in the form of ERC-20 standard tokens. The system will be implemented on a testnet using Hyperledger Besu software.

Recall that the Central Bank of Norway announced plans to test technical solutions for launching the national digital currency back in the spring of last year.