Norwegian Central Bank Open Sources CBDC Sandbox Code

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Blockchain
Norwegian Central Bank Open Sources CBDC Sandbox Code

Norway’s Apex bank has stepped up its digital currency adoption efforts by partnering with Ethereum layer-2 scaling platform, Nahmii to release the open source code for the country’s central bank digital currency (CBDC) sandbox.

Norway Taps Ethereum for CBDC Development

Nahmii stated that the code would be offered under an open-source Apache 2.0 License, the sandbox is designed to produce an interface with the test network, enabling functions like minting, burning, and the transfer of ERC-20 tokens.

The layer-2 scaling protocol also emphasized that the current version of the code was not designed to support the Ethereum wallet, MetaMask, and can only be accessed privately by users with the appropriate credentials.

“In addition to deploying the appropriate smart contracts and access controls, the Norges Bank sandbox includes a custom frontend and network monitoring tools (BlockScout and Grafana). The frontend also shows a filterable summary of transactions on the network.” the blog post said.

Further Developments in Sight

The partnership promises more developments in the coming days, with updates including “more complex and interesting use cases,” like batch payments, security tokens, and bridges. This will involve custom smart contract work and additional front-end development.

 “We expect to deliver the second part of the project to Norges Bank by mid-September, with the source code likely to be made publicly available soon afterward,” Namhii said.

For interested parties looking to interact with the CBDC sandbox code, Namhii gave out two options, the first one being tendering a request to the Norwegian central bank through an official of the bank to access the complete CBDC environment, including “the ability to see transaction details.” The second option is to spin up a standalone version of the sandbox by using the Namhii source code and the standard Docker images.

The Norges Bank also reiterated on Friday, September 9, 2022, in a Twitter post, that Norway’s CBDC prototype infrastructure is based on the Ethereum blockchain.

This is in relation to a CBDC-related blog post released in May 2022, where the central bank stated that the Ethereum network is expected to provide a “core infrastructure” for issuance, distribution, and destruction of digital central bank money, which is also referred to as DSP. “The prototype will be used to test a number of the important features for DSP,” the bank said.

The Norges Bank officially announced plans to conduct CBDC tests in April 2021, exploring technical solutions for a functional CBDC by trialing different designs for two years.

CBDCs – A Growing Interest among Central Banks

Interest in CBDCs has grown in response to changes in payments, finance, and technology, as well as the economic disruptions caused by the pandemic.

More countries are looking to adopt digital versions of their currencies to help actualize good objectives, such as safeguarding public trust in money, maintaining price stability, and ensuring safe and resilient payment systems and infrastructure.

According to the IMF, over 100 central banks worldwide are either thinking about starting a CBDC, testing it out in a pilot project, or already using one.

China is regarded by many as the leading nation in terms of CBDC testing and adoption, In May 2022, Chinese authorities tested the digital RMB smart student ID card at the Hainan Lu Xun Middle School where children can use the card on the school’s campus for making payments.

Ogwu Osaemezu Emmanuel

Ogwu Osaemezu Emmanuel is a graduate of Mass Communication and Media Studies. He joined the blockchain movement in 2016 when a friend of his introduced him to an investment platform accepting bitcoin. He has never looked back since then. Emmanuel believes the world needs real change and freedom from poverty. He sees crypto and the underlying distributed ledger technology as the catalyst to a better future for all.