Sweden’s central bank completes first phase of digital currency pilot

After finishing the first phase of its digital currency pilot venture, Sveriges Riksbank has discovered some essential points that have to be addressed earlier than Stockholmers can purchase espresso and kanelbullar with e-krona.

In a latest study, Sweden’s central bank offered the first outcomes of its central bank digital currency pilot on a community based mostly on R3’s Corda blockchain.

The Riksbank simulated core elements of a possible CBDC system, together with liquidity provide by way of the Riksbank’s settlement system, RIX, and community members serving as e-kronor distributors. The central bank additionally simulated individuals, end-users and fee devices like cellular apps.

The Riksbank mentioned that the brand new CBDC technology wants additional investigation, with scalability presenting a serious 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 famous.

The central bank additionally famous some privateness challenges, stressing that the knowledge contained in an e-krona transaction have to be protected to uphold banking secrecy legal guidelines and keep away from revealing private information. 

“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 acknowledged.

Mithra Sundberg, head of Riksbank’s e-krona pilot division in Stockholm, said that Sweden’s CBDC might in all probability require a brand new authorized framework earlier than it may be used. Given the scope of points that must be addressed earlier than an e-krona may be severely developed, Riksbank could proceed its blockchain pilots till 2026.

Riksbank acknowledged that it’ll lengthen its settlement with accounting big Accenture as a technical provider to proceed e-krona testing. The focus for the second phase will embrace potential distributors of the e-krona, CBDC efficiency in retail funds, in addition to storage strategies. The new phase may even check offline e-krona performance and integration with present point-of-sale terminals.

As beforehand reported, Sweden has emerged as one of the world’s earliest CBDC explorers, announcing a pilot platform for the e-krona in late 2019.