After completing the first phase of the pilot project for digital currency, the Riksbank of Sweden has identified some critical problems that must be solved before the inhabitants of Stockholm can buy e-krona coffee and cinnamon buns.
In a recent study, the Riksbank presented the first results of experiments with the central bank’s digital currency on the R3 blockchain-based network, Corda.
The Riksbank has modeled key aspects of a potential CBDC system, including the delivery of liquidity through the Riksbank settlement system, RIX, and network members who act as e-wife distributors. The central bank has also modeled participants, end users and payment instruments as mobile apps.
The Riksbank said that the new CBDC technology requires further studies and scalability is a major bottleneck.
“The solution that was tested in the first phase of the e-krone test met the performance requirements for public procurement. But this happened in a limited test environment, and the new technology’s ability to handle large-scale retail payments requires further study and testing, ”he said. report notes.
The central bank also pointed out some privacy issues and emphasized that the information in an e-krona transaction must be protected in accordance with the Bank Secrecy Acts and to avoid the disclosure of personal information.
The bank said: “The Riksbank is currently analyzing the extent to which information stored in the transaction log can be considered bank secrecy information, and whether it includes personal information.”
Mitra Sundberg, head of the experimental e-krona division at the Riksbank in Stockholm, said that Sweden’s central bank currencies will probably require a new legal framework before they can be used. Given the number of problems that must be solved before the e-krone can be developed seriously, the Riksbank can continue to pilot blockchain programs until 2026.
The Riksbank said that it would renew the agreement with the accounting giant Accenture as a technical resource to continue testing the e-krona. The second phase will focus on potential distributors of e-kroner and the efficiency of digital currency in retail payments, as well as storage methods. The new stage will also test e-krona’s stand-alone functions and integration with existing POS terminals.
As previously reported, Sweden became one of the first CBDC researchers in the world, and announced an experimental e-krona platform at the end of 2019.