Sweden’s central bank Riksbank has announced that it will extend the pilot of its e-krona digital currency until February 2022.

Riksbank, in partnership with Accenture, is conducting a test project to develop a proposal for a technical solution for an e-krona that can work as “a complement to cash.”

The main purpose of the pilot is for Riksbank to increase its knowledge of a central bank-issued digital krona.

In a staff memo about whether central bank digital currencies (CBDCs) can function as cash, the bank said that while many central banks are researching the possibility of issuing these digital currencies, they would not “function offline and anonymously in the same way as cash.”

“Both types of digital central bank currency require, however, that there are one or more registers behind them, keeping track of who owns the money,” the memo said. “The link to these registers means that neither the token-based nor the account-based money can offer the same anonymity as cash, as the transactions will be traceable. Nor will offline payments, where there is no communication with the register, be possible to any great extent. A token-based CBDC does not appear to have a greater capacity to fully replicate cash than an account-based one in this respect.”

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