The Estonian
central bank, Eesti Pank, announced the launch of a research program to
study how to build a digital currency infrastructure.

According to a statement,
Eesti Pank partnered with technology companies SW7 Group and Guardtime
for the research project. It aims to see if a keyless signature
infrastructure (KSI) blockchain solution can run its virtual currency
program. Estonia already uses KSI blockchain technology for its
e-government services. The bank’s project will also look into new
payment solutions “that can be made possible by using electronic IDs and
other Estonian e-government solutions.”

The project, however, will not specify which technologies should be used.

The
project will consist of several phases and will last about two years.
The first phase will study how to build a scalable, practical, and
secure platform that meets the requirements of digital funds. At the
same time, the platform also needs to tick the boxes of speed, security,
privacy, and resilience.

Rainer Olt, head of the bank’s Payment Systems Department, said:

“As
a small central bank, Eesti Pank carefully chooses which development
projects of euro area central banks we can make a meaningful
contribution to. Over the years, Estonia has developed unique know-how
on how to maintain a secure, private and efficient e-government.
Estonia's unique wealth of experience provides a good impetus to launch a
project with technology companies SW7 and Guardtime to explore
technological opportunities. The latter is Estonia's long-term
cooperation partner in the field of the blockchain and a complete top in
the world in its field.”

The bank stressed
that they are continually striving to develop the financial environment
and their payment system to keep pace with the times and meet the needs
of citizens.

Estonia has been leaning towards blockchain technology though its e-residency program recently came under fire when e-residents were linked to scams.

Last month, European Central Bank president Christine Lagarde explained that adopting the digital euro does not mean dispensing with the fiat.