MIT Introduces At-Scale Programmable CBDC Platform PArSEC3. August 2023
• MIT Digital Currency Initiative has launched the PArSEC platform, which is open source and developed with central bank digital currency (CBDC) in mind.
• PArSEC is capable of performing 118,000 ERC-20 transactions per second on 128 hosts and supports ERC-20 tokens.
• Programmability allows restrictions to be placed on the uses of a digital currency, which can be useful in a decentralized finance environment but can also enable governments to monitor citizens’ monetary activities.
What is PArSEC?
The Massachusetts Institute of Technology (MIT) Digital Currency Initiative (DCI) has introduced the experimental PArSEC platform. PArSEC — short for “parallelized architecture for scalably executing smart contracts” — is open source and developed with central bank digital currency (CBDC) in mind. It performed 118,000 ERC-20 transactions per second on 128 hosts — exceeding public permissionless blockchains. The platform supports ERC-20 tokens, so an automated market maker launched on the platform could transact with such assets as bonds, tokenized securities and repurchase agreements in addition to CBDCs.
Benefits of Programmable Platforms
Programmability allows restrictions to be placed on the uses of a digital currency, which can be useful in a decentralized finance environment. But it could enable governments to monitor citizens’ monetary activities as well. Virtual machines allow interactions between central and commercial banks to become simplified as well.
There are significant amounts of continuing research needed for this project, including security issues involving key management and data migration tooling that needs refinement. Privacy was also left as an open question concerning CBDCs that still needs addressing by developers in order for this platform to work efficiently and securely.
Crypto Community’s Viewpoints
The crypto community has largely opposed any form of CBDC due to privacy concerns brought up by programmability allowing asset backing and decentralization not possible under current designs. Developers have been urged by researcher Nikhil Raghuveera to take advantage of stablecoin assets instead rather than trying to compete with CBDCs when it comes down to programmable opportunities they offer over other methods currently being used now or proposed ones like this platform from MIT DCI .
Overall, MIT DCI’s new experimental PArSEC platform holds great potential for facilitating various forms of cross border contracting that involve CBDCs while maintaining privacy standards set by the crypto community yet still enabling programmability for advanced financial products that require such features like stablecoins . There are many challenges ahead however before its ready for full scale use but its important progress being made towards finding ways these two goals don’t have to be mutually exclusive .