Sweden’s Riksbank completes the first phase of its digital currency trial
- Per Sveriges Riksbank, the blockchain performed well in the first phase of testing.
- Riksbank aims to probe the blockchain further after realising scalability and privacy issues.
- The bank and Accenture are gearing up to proceed with the second phase of e-krona testing.
Riksbank, Sweden’s central bank, has finished the initial part of its digital currency experiment. The authority unveiled this news through a report, noting that it ran into some serious issues that it must address before Swedes can use the e-krona for daily purchases. To this end, the bank believes that it needs to probe the blockchain further to ensure it can handle retail purchases safely.
According to the report, the first phase of the pilot found that the blockchain meets the performance needs to support e-krona. However, the bank noted that the technology achieved this feat in a limited test environment. To ensure that the blockchain is fully capable of handling retail transactions in a large-scale retail setup, it needs further investigation.
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Raising scalability concerns, Riksbank said the blockchain must be able to support the e-krona so that its use is similar to that of cash. The bank claims that for this to happen, the e-krona must be traceable back to it. On top of this, the bank must also create new tokens for new transactions to be completed. In the process, there will be a large volume of information, which requires a high-performance system.
Working relentlessly to get all facts right
Regarding privacy, Riksbank said that the blockchain should be able to monitor how a single coin has been used in transactions, leading up to the most recent one without raising privacy concerns whenever a user makes a digital payment. Seeing as the blockchain requires a complete record of previous transactions to verify the authenticity of new ones, the banks questions whether it will be able to meet banking secrecy requirements.
The bank said,
The information contained in an e-krona transaction about other customers and other participants than the customers and participants involved in the transaction must therefore be protected in such a way as to uphold banking secrecy and to avoid revealing personal data.
Riksbank added that it is currently analyzing the extent of data stored in e-krona transaction history and whether it comprised personal details. Additionally, the bank is working to find just how much data the Bank Secrecy Act considers information.
Despite hitting these snags, the bank noted that it would continue working with Accenture to test the feasibility of launching e-krona. Forging forward, the duo aims to introduce potential e-krona distributors in the second phase. In so doing, Riksbank hopes to find out whether the distributors’ internal systems can work with the e-krona network.