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Central banks globally are increasingly exploring blockchain technology, with the <a href="https://www.ecb.europa.eu/" data-wpel-link="external" target="_blank" rel="nofollow external noreferrer">European Central Bank </a>(ECB) being a recent participant. 
The ECB recently completed a blockchain experiment for its central bank digital currency (CBDC) with Zama, as announced by Nigel Smart, the firm’s chief academic officer. 
During a panel at FHE Summit 2024, Smart stated, “We did one with the European Central Bank on liquidity matching. […] And a number of applications on CBDCs have been actually to remove the central bank out of the equation and replace it with a blockchain.” 
Liquidity matching, the process of aligning a bank’s inflows and assets with its outflows and liabilities to ensure sufficient funds to meet obligations, is crucial. 
However, Smart highlighted that liquidity matching is challenging for multiple parties transacting on the same blockchain network. 
He elaborated, “Then the issue is if you have multiple entities on the blockchain and it’s all encrypted stuff, how do you do liquidity matching? That’s a really big issue.” 
Smart, a prominent cryptographer, is developing fully homomorphic encryption (FHE) solutions for blockchain and artificial intelligence at Zama. 
FHE allows computations on encrypted data without decrypting it, enhancing data security. 
READ MORE: <a href="https://www.cryptointelligence.co.uk/bitcoin-poised-for-300-gains-by-2026-despite-current-downturn-analyst-predicts/" data-wpel-link="internal">Bitcoin Poised for 300% Gains by 2026 Despite Current Downturn, Analyst Predicts</a> 
In early March, Zama secured a $73 million Series A funding round to advance the firm’s FHE stack and provide developers with more tools for data privacy solutions. 
Multiparty computation (MPC), which enables multiple parties to compute shared data without revealing the actual data, also shows promise. 
Smart noted that the MPC-based experiment with the ECB was successful, but scaling to support the entire European economy will require more time. 
He said, “We did an experiment with the European Central Bank where we essentially ran the Finnish economy through an MPC engine, and we could keep track. We could actually keep up with Finland, which is good, but not on the European scale yet.” 
Smart added that the financial sector is increasingly exploring MPC technology, which could lead to more use cases for large financial institutions. 
This growing interest in advanced cryptographic solutions signifies the financial sector’s drive towards greater security and efficiency through technology. 
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European Central Bank Explores Blockchain for Digital Currency with Successful Liquidity Matching Experiment

Crypto Intelligence

Artikel lain yang dipublikasikan pada 11 Jul 2024

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