Estonian central bank talks up digital euro experiment results

Estonian central bank talks up digital euro experiment results

News
July 28, 2021 by J.D. Smith
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A blockchain-based digital euro could in theory support almost unlimited numbers of payments being processed at the same time with a very large money supply and with a smaller carbon footprint than the card payment system, concludes Estonia’s central bank following an experiment with the ECB. Eesti Pank worked with the ECB and the central
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A blockchain-based digital euro could in theory support almost unlimited numbers of payments being processed at the same time with a very large money supply and with a smaller carbon footprint than the card payment system, concludes Estonia’s central bank following an experiment with the ECB.

Eesti Pank worked with the ECB and the central banks of Spain, Germany, Italy, Greece, Ireland, Latvia and the Netherlands on a research experiment to assess one possible technical solution for the digital euro.

The project looked at how a digital euro built on the blockchain technology that already serves as the basis for the Estonian e-state could perform in terms of the number of payments and money-holders and its energy costs, and how digital identities could be linked and privacy ensured.

Payments were made between people with digital identities from Estonia, Latvia, Lithuania and Spain.

Eesti Pank says that the effort overcame earlier blockchain issues such as low performance and high energy costs. The test handled over 300,000 simultaneous payments a second and the money reached the payee in less than two seconds. The estimated carbon footprint was smaller than that of the card payment system currently in use.