Post completion of the initial phase of the pilot project revolving around digital currency, some severe issues were discovered by Sveriges Riksbank. According to them, those critical problems need to be addressed pretty soon. As per recent studies, the central bank of Sweden happens to present initial results concerning its CBDC pilot project upon a network-based blockchain.
Apart from that, the Riksbank anticipated inherent aspects concerning a possible CBDC system, thereby incorporating liquid resupply with the help of the bank’s settlement system. Moreover, the central bank additional simulated end-users, payment instruments, and participants.
According to the bank, the new CBDC technology requires additional investigations, thereby requiring scalability concerning a significant bottleneck. As per the report, the solution examined in phase one concerning the pilot project has attended to the performance demands made within the public procurement. However, this has happened within a restricted test environment along with the capacity of the new technology to maintain retail payments depending on a large scale needs to be tested and investigated later.
Other than this the central bank additionally noted particular privacy challenges, thereby stressing that the data incorporated in a transaction needs to be protected for upholding the banking secrecy laws, hence avoiding the revealment of personal data. According to the bank, they are presently analyzing to the extent the data saved in the transaction history can be considered as data covered by banking secrecy. Apart from that, whether or not it incorporates personal information is also being analyzed.
According to the head of the bank’s pilot project in Stockholm, CBDC possibly could need a new authentic framework before usage. Provided the scope of problems that are required to be addressed before the pilot project can be actually developed, Riksbank might proceed with its blockchain pilot projects until 2026. Furthermore, the bank announced that it is likely to extend its agreement with an accounting company as a text supplier to proceed with the testing of the pilot project.
The second phase is focused on including possible distributors of the pilot project, thereby including the performance of Central Bank digital currency in retail payments along with storage methods. Other than that, the second phase will additionally test offline functionality and combination with existing POS terminals.