Central Bank of Norway Utilizes ETH to build national digital currency

12-Sep-2022 By: Sudeep Saxena

The Norwegian central bank has achieved a significant milestone in its digital currency efforts by releasing the open source code for the country's central bank digital currency (CBDC) sandbox | best crypto currency app

The sandbox, which is available on GitHub, is intended to provide an interface for interacting with the test network, enabling tasks like minting, burning, and transferring ERC-20 tokens, according to a blog post by Norges Bank's official CBDC partner Nahmii.

Nahmii emphasized that the current version of the code is not designed to support the popular Ethereum wallet MetaMask and is only accessible privately to those with appropriate credentials.

In addition to smart contracts and access limitations, the Norges Bank sandbox features a unique frontend and network monitoring tools like BlockScout and Grafana. According to Nahmii, the front end also offers a filterable summary of network transactions.

On Friday, Norges Bank announced on Twitter that Norway's CBDC prototype infrastructure is built on Ethereum technology.

The central bank previously mentioned ETH in a CBDC-related blog post in May. The Norges Bank stated that the Ethereum cryptocurrency network is intended to offer a key infrastructure for the creation, distribution, and destruction of digital central bank money, also known as DSP. The prototype will be used to test a variety of critical DSP functions, the bank said.

As previously reported, the Norges Bank officially announced plans to conduct CBDC trials in April of last year, aiming to establish a preferable CBDC solution after two years of testing different prototypes.

In November 2021, the central bank issued a working paper referring to several CBDC designs, including those based on blockchains such as Ethereum, Bitcoin, and Bitcoin SV. The Norges Bank underlined that interoperability was one of the most important issues while considering alternative technical solutions.

The announcement coincided with the release of a report by the International Monetary Fund indicating that 97 countries, or more than half of global central banks, were exploring or developing CBDCs as of July 2022. According to the IMF, only two countries have fully launched CBDC projects so far: Nigeria and The Bahamas.

In September, the IMF announced that it was working on a project related to an interoperable CBDC platform that would connect multiple global CBDCs and enable cross-border transactions.

WHAT'S YOUR OPINION?