The central bank of Estonia has discovered what it describes as ‘unlimited potential’ in its blockchain-based digital euro trials after discovering that blockchain tech can ‘in theory’ support almost unlimited scale in transaction throughput. Eesti Pank announced it had discovered a “novel blockchain-based solution could in theory support almost unlimited numbers of payments being processed simultaneously” after an experiment conducted in collaboration with several other local central banks inside the euro area.
Participants sent payments across borders.
Working in partnership with counterparts in Spain, the Netherlands, Germany, Italy, Greece, Latvia, and Ireland, the central bank’s experiment was powered by the same blockchain technology as its e-Estonia digital society scheme, which uses the technology to digitize dealings between the state and its citizens increasingly. As part of the experiment, participants sent payments across borders between the test countries, using their digital identities in order to facilitate the transactions. The study also found that transaction volumes of almost 300,000 transactions per second were possible, with payments settling in as little as 2 seconds.
Bank of Estonia did not mention which blockchain they used for the digital euro trials.
In its published executive summary, the Bank of Estonia did not mention which blockchain they used for the digital euro trials. However, the central bank noted that “the CBDC system evaluated combined an existing blockchain-based platform with novel architecture for money and payments, instantiating value in digital bills, which are fixed-value tokenized representations of banknotes that represent the liabilities of the central bank.” “This technology does not set any essential limits on the size of the money supply. The system is able to handle the entire supply of euros in circulation and more,” a spokesperson for Esti Pank noted.