“Offline e-krona payment risks in Sweden – warning from Riksbank”

Risks Associated with Offline e-Krona Payments in Sweden – Warning from Riksbank

Riksbank, the central bank of Sweden, has pointed out the need for both technical and regulatory development to ensure secure offline payments using the digital currency e-Krona. However, a recent publication from the institution warns of potential risks associated with unsynchronized data in offline transactions.

Synchronized Online and Offline Transactions Key to Risk Minimization

It is crucial for offline transactions to be synchronized with online balances in order to minimize liquidity risk associated with so-called “shadow wallets” and intermediary nodes facilitating connections between offline and online wallets. The risk becomes particularly apparent when multiple users make successive offline transactions without proper synchronization.

It is also important to ensure that balances in offline wallets match online balances to avoid discrepancies that could lead to improper reduction of funds for recipients.

Potential Solutions Considered by the Swedish Central Bank

The Swedish central bank is considering various solutions, such as creating a liquidity pool for offline payments or imposing restrictions on the use of e-Krona in offline mode. There is also a proposal for e-Krona received in offline mode to only become available for offline transactions after synchronization with the network.

The central bank of Sweden is actively analyzing possible scenarios and consequences related to offline e-Krona payments. Decisions regarding the introduction of the digital currency and the choice of appropriate technology have not yet been finalized.