Blockchain ‘interesting and promising, but not there yet’ according to Dutch Central Bank

Experiments show potential, but need development

Dutch Central Bank

Last updated on June 9th, 2018 at 12:43 pm

The Netherlands, a small country known for innovation, has been experimenting with Blockchain technology as addition to the payment system. But, according to them, Blockchain isn’t ready. Yet. Because the Dutch Central Bank (DNB) does acknowledge the promising future of Blockchain technology.

The greatest shortcoming of Blockchain for DNB is that Distributed Ledger Technology (DLT) isn’t suitable for the existing payment infrastructure. Due to a “shortage of capacity, efficiency, high energy consumption” for large scale volumes of transactions.

For the past 4 years DNB has been experimenting with DLT in a project called Dukaton, main goals were to gain knowledge about DLT and Blockchain and to see how the technology could be integrated functionally to better the current payment infrastructure.

Prototypes from the Dukaton showed most Blockchain technology wasn’t able to handle the demands of the current financial market infrastructure – which has bound by strict requirements from the FMI. Requirements such as safety, efficiency, finality of payment and scalability. Current systems in place can handle large volumes, and Blockchain just isn’t ready to handle such volumes yet. There’s a possibility that DLT is able to better the efficiency of multi-valuta payments, according to DNB.

The Dutch Central Bank will keep looking forward to developments in Blockchain, which are “interesting and promising”. Click To Tweet

DNB will keep looking forward to developments in Blockchain, which are “interesting and promising”. New algorithms might be able to handle the requirements from FMI’s better, according to DNB. Therefore DNB will keep investing in knowledge and experimenting with Blockchain technology.

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Written by Pete Gabriel

Journalist and tech lover.