Estonia Central Bank highlights positive results of digital currency testing

Karthik Subramanian

The Estonian Central Bank, which recently conducted research and experiment on the use of digital currencies, has concluded that a digital euro would be good for the financial and economic system as it can support a very large number of payments at the same time along with other advantages.

Estonia

Eesti Pank, the name of the central bank in Estonia, had worked with the European Central Bank (ECB) to study the effect and possibilities of introducing a digital euro alongside the existing monetary system. The bank had worked along with the central banks of Spain, Germany, Italy, Greece, Ireland, Latvia, and the Netherlands.

The bank had concluded the research on a positive note saying that the digital euro could support a huge number of payments at the same time and also leave a very less carbon footprint on the environment when compared to the card payment system that is growing right now.

It is reliably learned that over 60 countries have their central banks conducting a variety of research and experiments on the use of digital currencies and these findings should be a boost for the proponents of digital currencies and could spur on further research and development of the same.

The ECB has not yet signalled the launch of a digital euro and it is believed that it could still be at least a couple of years before digital currencies come into force in any country. But the ECB has given the go-ahead for research and experiments to continue on the digital euro while the technology or the blockchain to be used is likely to be decided later.

The experiment is expected to feed into the next phase of the digital euro programme where select users and banks are likely to be introduced into the mix, their views sought and they are also likely to participate in the testing and give feedback as well as challenges that are likely to be faced when a digital euro is launched.

One of the challenges is to see whether the digital currency would replace cash in the short term but that seems to have been removed and it is more likely the digital euro would also exist along with cash with the banks guaranteeing the value of the digital euro just like normal cash. It is believed that the launch of the digital euro would reduce the use of cash and also card payments and these digital wallets that are used to store the digital euro would cause much less hard to the environment in the long run.

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