• The Norwegian central bank is developing a national digital currency using Ethereum

  • The Norwegian central bank has reached a significant milestone in its digital currency initiatives by publishing the open source code for the country’s central bank digital currency (CBDC) sandbox.

    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 sufficient credentials.

    The Norges Bank sandbox contains a unique frontend as well as network monitoring tools such as BlockScout and Grafana, in addition to the requisite smart contracts and access controls. According to Nahmii, the front end also displays a filterable overview of network transactions.

    Last Friday, the Norges Bank announced on Twitter that Norway’s CBDC prototype infrastructure is built on Ethereum technology.

    In a CBDC-related blog post in May, the central bank previously mentioned Ethereum. According to the Norges Bank, the Ethereum cryptocurrency system is planned to provide a “fundamental infrastructure” for the issuance, distribution, and destruction of digital central bank money, also known as DSP. “The prototype will be used to test a variety of crucial DSP features,” the bank explained.

    As previously reported, the Norges Bank officially revealed plans to conduct CBDC experiments in April of last year, aiming to establish a preferable CBDC solution after two years of trialing several designs.

    The central bank produced a working paper in November 2021 alluding to potential CBDC architectures, including those based on blockchains such as Ethereum, Bitcoin, and Bitcoin SV. While considering alternative technical solutions, the Norges Bank emphasized that interoperability was one of the most critical issues.

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

    The IMF said in September that it was working on a project including an interoperable CBDC platform that would connect different worldwide CBDCs and enable cross-border transactions.

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