Researchers developed a platform for scaling and programming CBDCs with support for smart contracts. The platform will enable a number of experiments that could potentially improve the functionality of government digital currencies.
Researchers from the Massachusetts Institute of Technology (MIT), together with representatives from the Federal Reserve Bank of Boston (FRBB), presented PArSEC (Parallelized Architecture for Scalably Executing smart Contracts), a platform for experimenting with central bank digital currencies (CBDC) and smart contracts.
The PArSEC platform offers high bandwidth and linear scalability, allowing smart contracts to be executed in a centralized environment. The developers of the platform reported that during trials, it processed 118,000 transactions per second across 128 nodes.
PArSEC’s modular architecture enables different types of smart contracts to be executed, making the platform an ideal environment for research and experimentation. In addition, the platform is able to utilize already existing tools for smart contracts, which facilitates their deployment. For instance, PArSEC can be used to test smart contracts of various decentralized applications, such as DEXs.
PArSEC supports ERC-20 tokens, enabling the automation of bond transactions, tokenized securities, repurchase transactions, and CBDCs. By supporting virtual machines, the platform can simplify the interaction between central and commercial banks.
The code of the platform is published in the public domain. The creators of PArSEC encourage everyone to test its capabilities and share their experience, which will make a valuable contribution not only to the development of CBDCs but also to the creation of an innovative financial system of the future. However, the developers also don’t deny that the platform has shortcomings. Thus, the practical application of PArSEC isn’t recommended until some issues in the field of security and privacy of users are solved.
The BIS representatives called to accelerate the development of CBDCs due to the growing popularity of cryptocurrencies and tokenized assets and also published a detailed plan, which will allow central banks to ensure the protection of CBDCs from various cyber threats.
