Riksbank, Sweden’s central bank, has completed the initial part of its digital currency experiment. The authority released this news through a report, noting that it ran into some serious issues that it must address before Swedes can use e-krona for everyday purchases. To this end, the bank believes that it needs to investigate the blockchain further to ensure that it can safely handle retail purchases.
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 accomplished this feat in a limited testing environment. To ensure that the blockchain is fully capable of handling retail transactions in a large-scale retail setup, it needs more research.
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Raising concerns about scalability, Riksbank said that the blockchain must be able to support e-krona for its use to be similar to cash. The bank states that for this to happen, the e-krona must be traceable to it. In addition to 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.
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Regarding privacy, Riksbank said that the blockchain should be able to monitor how a single currency has been used in transactions, leading to the most recent one without raising privacy concerns each time a user makes a digital payment. Since the blockchain requires a full record of previous transactions to verify the authenticity of new ones, banks question whether it will be able to comply with bank secrecy requirements.
The bank said,
Therefore, the information contained in an e-krona transaction about other customers and other participants other than the customers and participants involved in the transaction must be protected in such a way that bank secrecy is maintained and the disclosure of personal data is prevented. .
Riksbank added that it is currently analyzing the extent of the data stored in e-krona’s transaction history and whether it included personal data. In addition, the bank is working to find how much data the Bank Secrecy Law considers information.
Despite facing these drawbacks, the bank said it would continue to work with Accenture to test the feasibility of launching e-krona. Moving forward, the duo aims to introduce potential e-krona distributors in the second phase. In doing so, Riksbank hopes to find out whether the distributors’ internal systems can work with the e-krona network.
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