Sweden’s central bank Sveriges Riksbank has announced that the first phase of its digital currency (e-krona) pilot project has been completed, which has been going on since February 20, 2020.
The central bank has spotted some critical issues that must be raised before e-krona can be used for everyday purchases.
According to a recent study, Riksbank stated that the new CBDC technology requires more investigation as the scalability is causing a major bottleneck.
The report said:
“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.”
Besides the issue mentioned above, there is also the subject of privacy that must be taken into account. The central bank is adamant about keeping the information contained in an e-krona transaction protected, in order to abide by banking secrecy laws and prevent personal data leakage.
The Head of Riksbank’s e-krona pilot division in Stockholm, Mithra Sundberg remarked that a new legal framework may be required before Sweden’s CBDC can be utilized.
Considering that there are still many issues left to address, the central bank may continue its blockchain pilots for another 5 years.
Riksbank’s agreement with accounting powerhouse Accenture will be extended so as to resume the e-krona testing. The second phase will involve potential distributors of the e-krona, CBDC performance in retail transactions, and storage methods. Offline e-krona functionality and integration with existing POS (point-of-sale) terminals will also be tested.