They’re following other central banks, including the European Central Bank, into studying virtual currencies.
The Estonian central bank, Eesti Pank, announced the launch of a research program to study how to build a digital currency infrastructure.
According to a statement, Eesti Pank partnered with technology companies SW7 Group and Guardtime for the research project. It aims to see if a keyless signature infrastructure (KSI) blockchain solution can run its virtual currency program. Estonia already uses KSI blockchain technology for its e-government services. The bank’s project will also look into new payment solutions “that can be made possible by using electronic IDs and other Estonian e-government solutions.”
The project, however, will not specify which technologies should be used.
The project will consist of several phases and will last about two years. The first phase will study how to build a scalable, practical, and secure platform that meets the requirements of digital funds. At the same time, the platform also needs to tick the boxes of speed, security, privacy, and resilience.
Rainer Olt, head of the bank’s Payment Systems Department, said:
“As a small central bank, Eesti Pank carefully chooses which development projects of euro area central banks we can make a meaningful contribution to. Over the years, Estonia has developed unique know-how on how to maintain a secure, private and efficient e-government. Estonia’s unique wealth of experience provides a good impetus to launch a project with technology companies SW7 and Guardtime to explore technological opportunities. The latter is Estonia’s long-term cooperation partner in the field of the blockchain and a complete top in the world in its field.”
The bank stressed that they are continually striving to develop the financial environment and their payment system to keep pace with the times and meet the needs of citizens.
Estonia has been leaning towards blockchain technology though its e-residency program recently came under fire when e-residents were linked to scams.
Last month, European Central Bank president Christine Lagarde explained that adopting the digital euro does not mean dispensing with the fiat.