Estonia’s central bank says a blockchain-based digital euro could be highly scalable, with the potential to support an “almost unlimited” number of simultaneous payments. The finding came from a recent experiment conducted during the digital euro project’s investigation phase, with participation from seven other euro area central banks and the European Central Bank.
Trial processed over 300,000 payments per second
According to Eesti Pank, the test was designed to evaluate a possible technical architecture for a central bank digital currency. During the experiment, digital-money payments were made between users with digital identities in Estonia, Latvia, Lithuania, and Spain. The tested system was able to process more than 300,000 payment transactions per second, while funds reached recipients in less than two seconds.
The Estonian central bank also said the network’s estimated carbon footprint was lower than that of the current card payment system. That result suggests a future digital euro built on similar technology could offer not only strong performance, but also improved environmental efficiency compared with existing payment rails.
No essential limits on monetary scale
Eesti Pank said experts were able to overcome several previously identified bottlenecks. Because of the scalability of the blockchain technology used in the test, the number of digital euro payments could be increased further if needed. The central bank added that the system imposes no essential limits on the size of the money supply.
In its assessment, the platform is capable of handling the entire supply of euros currently in circulation and even more, while also placing no clear cap on the number of users or the number of simultaneous payments. That position highlights the potential suitability of the design for large-scale retail payment use cases across the euro area.
Project remains in the investigation phase
The ECB’s Governing Council approved further preparation work on the digital euro in mid-July, but a final decision on issuance has not yet been made. During the investigation phase, expected to last around 24 months, the ECB plans to involve more banks and payment service providers and run user surveys to assess the available options for issuing a digital euro and the infrastructure it would require.
Eesti Pank said it will continue to take part in future trials. Overall, the latest test adds technical support to the case for a digital euro by pointing to strong throughput, fast settlement, and a workable balance between privacy considerations and anti-money laundering requirements.