Sveriges Riksbank discovered some important issues that must be resolved before Stockholmers can purchase coffee and kanelbullar with e-krona after finishing the first phase of its digital currency pilot project.
In a recent study, Sweden’s central bank presented the first results of its central bank digital currency pilot on a network based on R3’s Corda blockchain.
The Riksbank simulated key facets of a possible CBDC scheme, such as liquidity supply through the Riksbank’s settlement system, RIX, and network representatives acting as e-kronor distributors. In addition, the central bank simulated members, end-users, and payment instruments such as smartphone applications.
According to the Riksbank, the latest CBDC technology needs further research, with scalability posing a big bottleneck.
“The solution tested in phase one of the e-krona pilot has met the performance requirements made in the public procurement. But this has taken place in a limited test environment and the new technology’s capacity to manage retail payments on a large scale needs to be investigated and tested further,” the report noted.
The central bank also listed several privacy issues, highlighting the importance of preserving the information stored in an e-krona transaction in order to maintain banking confidentiality laws and avoid exposing personal details.
“The Riksbank is currently analysing to what extent the information stored in the transaction history can be regarded as information covered by banking secrecy and whether it comprises personal data,” the bank stated.
According to Mithra Sundberg, head of Riksbank’s e-krona pilot division in Stockholm, Sweden’s CBDC can need a new legal system before it can be used. Given the breadth of issues that must be resolved before an e-krona can be considered seriously, Riksbank can extend its blockchain pilots until 2026.
Riksbank announced that it would expand its deal with accounting behemoth Accenture as a technical provider in order to begin e-krona research. The second step will concentrate on future e-krona vendors, CBDC output in retail payments, and storage methods. Offline e-krona functionality and alignment with existing point-of-sale terminals will also be tested in the new process.
As previously mentioned, Sweden has emerged as one of the world’s first CBDC adventurers, unveiling in late 2019 a pilot platform for the e-krona.
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