Kristel Moor
Title: IMPLEMENTING CENTRAL BANK DIGITAL CURRENCY (CBDC) INTO THE NATIONAL MONETARY SYSTEM: THE CASE OF ESTONIA
Supervisor: Dr. Egert Juuse
Opponent: Nastassia Harbuzova, MSc
Defense: 19 January 2022
Abstract: This study aims to gain a better understanding of Estonia’s readiness to implement a blockchain-based digital euro. The study analyzes how well the current digital infrastructure, organizational forms, and institutional arrangements support the implementation of the central bank digital currency (CBDC) into the national monetary system. In this exploratory case study, the technology enactment framework (TEF) served as the basis for investigation. On the basis of the results of this research, it can be concluded that Estonia has established an overall favorable environment for a blockchain-based digital currency, however certain additional elements are required. In Estonia, the objective information technologies are extremely advanced utilizing blockchain technology, X-Road ecosystem (X-tee), and digital identity card system. However, the security risks of the current digital infrastructure, including cyber threats and disruptions with hardware, have to be mitigated to link parts of it with the digital euro. Further, additional methods to acquire user identification data must be implemented because the current ID-card system fails to meet the global accessibility requirement. In terms of X-tee, additional security systems should be developed to ensure that organizations using the network fully comply with essential security measures in order to consider it as a possible data exchange layer for the CBDC project. In the institutional arrangements dimension, Estonia’s strong national branding as a digital nation increases citizens’ openness to adopt future digital initiatives. Further, changes in legislation on the European Union level are required to include retail CBDC as a legal tender. The study concludes that further user research is needed to find the most crucial attributes that people expect and need from the digital euro.
Keywords: central bank digital currency, digital euro, monetary policy
