With cash usage dwindling in Sweden, the Riksbank started a project in the spring of 2017 to examine the scope for the creation of a central bank digital currency (CBDC) that could ensure that the general public will still have access to a state-guaranteed means of payment.

Last February, the bank set out plans for a year-long pilot project with Accenture to develop a technical DLT-based platform with a user interface that enables e-krona payments from cards, mobile phones and wearables.

The project has now been extended for another year, as the partners continue developing the technical solution, with the focus on performance, scalability, testing of off-line functions and bringing external participants into the test environment.

Meanwhile, in a new staff memo Riksbank says that any e-krona - whether account-based or token-based - would require registers behind them to keep track of who owns the money.

"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," says the memo.

The analysis contrasts with a recent Visa technical paper that outlines a novel approach for offline point-to-point payments between two devices, touting it as a means for central banks to replicate the physical exchange of cash using digital currencies.

The protocol outlined by Visa allows digital money to be directly downloaded onto a personal device, such as a smartphone or tablet. The money is stored on a secure hardware embedded in that device and managed by a wallet provider.

CBDC can be transacted from one device to another device directly without any intermediaries such as banks, payment networks, or payment processors by using Bluetooth and Near Field Communication.