Norway’s central bank uses Ethereum to create national digital currency

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Norway’s central bank has taken an important step in digital currency efforts, releasing the open source code for the country’s central bank digital currency (CBDC) sandbox.

Available on GitHub, the sandbox is designed to provide an interface for interacting with the testnet, enabling functions such as minting, burning and transferring ERC-20 tokens, official CBDC partner said. the Norges Bank, Nahmii, in a blog post.

Nahmii pointed out that the current version of the code does not support the main Ethereum wallet MetaMask by design and is only privately accessible to users with the correct credentials.

In addition to deploying the appropriate smart contracts and access controls, the Norges Bank sandbox includes a custom interface and network monitoring tools such as BlockScout and Grafana. The front end also displays a filterable summary of network transactions, Nahmii noted.

Norges Bank took to Twitter last Friday to mention that Norway’s prototype CBDC infrastructure is based on Ethereum technology.

The central bank previously referenced Ethereum in a CBDC-related blog post in May. Norges Bank said the Ethereum cryptocurrency system should provide a “basic infrastructure” for the issuance, distribution and destruction of central bank digital currency, also known as DSP. “The prototype will be used to test a number of important features for DSP,” the bank said.

As previously reported, Norges Bank officially announced its intention to conduct CBDC tests in April last year, hoping to find a preferred CBDC solution by testing different designs over a two-year period.

In November 2021, the central bank released a discussion paper referencing possible CBDC designs, including those based on blockchains like Ethereum, Bitcoin, and Bitcoin SV. Norges Bank highlighted interoperability as one of the most important issues when considering various technical solutions.

Related: The Reserve Bank of India is preparing to test a CBDC with public sector banks and fintechs

The news came as the International Monetary Fund released a report indicating that 97 countries, or more than half of the world’s central banks, were exploring or developing CBDCs as of July 2022. On the other hand, only two countries have fully launched projects. of CBDC so far. , including Nigeria and the Bahamas, the IMF said.

Global development of CBDCs in 2022. Source: IMF

In September, the IMF said it was working on a project related to an interoperable CBDC platform linking multiple global CBDCs and enabling cross-border transactions.