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Theoretical research by The Federal Reserve Bank of Boston and the Digital Currency Initiative at MIT has established that CBDC distributed ledger architecture has downsides.
Source: Federal Reserve Bank of Boston
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The research, dubbed Project Hamilton, assessed a hypothetical general-purpose CBDC in possible models.
The first model processed transactions via an ordering server distributed ledger technology, where the validated transactions were organized into blocks to create ordering transaction history.
Using the model, the researchers completed 99% of transactions in less than two seconds and most transactions in less than 0.7 seconds.
The ordering server, however, resulted in multiple issues for being run under a single actor, making the researchers conclude that the distributed ledger architecture has flaws.
The findings note that despite using the ideas of blockchain technology, a distributed ledger under the jurisdiction of different actors was not needed.
The second architecture processed transactions on multiple computers instead of a single ordering server to avoid double-spending. The research concluded that although it augmented scalability, it did not provide ordered transaction history.
The Boston Fed Executive Vice President and interim COO Jim Cunha says that Project Hamilton points out the challenges ahead in adopting CBDC. The initiative was first announced in 2020.
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