Called PArSEC, the new platform is part of the work carried out by the Digital Currency Initiative (DCI) research community at MIT to delve deeper into new technologies.
PArSEC (Parallelized Architecture for Scalably Executing Smart Contracts) is a distributed platform designed to run various smart contract virtual machines. This new platform is the result of the research work that the DCI has been carrying out to create a flexible technical architecture for the deployment of central bank digital currencies, known as CBDCs, on a large scale.
According to the DCI, PArSEC is still in the exploration phase and has been published on GitHub under the OpenCBDC project.
However, the platform already supports several use cases for CBDCs, which seek to explore the potential of these digital assets beyond payments and transactions. For example, PArSEC supports smart contracts on the Ethereum network as well as ERC-20 transactions.
As the cryptocurrency and blockchain technology ecosystem has expanded, more central banks have joined the development of a CBDC. This type of currency is created as a digital representation of the fiat currency of a country, so it is a centralized asset with which banks seek to optimize their operations to overcome the deficiencies of the current financial system and to move towards the new digital economy.
The DCI highlighted that, currently, almost all central banks in the world are exploring or already developing their own CBDC digital currency, so the objective of PArSEC is to simplify the interaction of central banks with the digital environment and offer these entities new use cases for your digital currencies.
PArSEC explores new use cases for CBDCs
While it is true that many of the central banks that are developing a CBDC do so as a payment solution, to try to prevent their citizens from using decentralized cryptocurrencies and tokens, MIT is exploring new use cases for these digital currencies , which go beyond payments.
PArSEC can execute a wide variety of smart contracts, allowing more complex use cases for CBDCs to be explored. For example, boosting private financial sector participation in the DeFi ecosystem, deploying Automated Market Maker (AMM) systems to trade bonds and tokenized securities, creating interoperable and cross-border settlement solutions, and optimizing networks and supply chains. These could be some of the most impactful use cases for CBDCs and PArSEC allows you to explore them, Indian the institution.
Scalability without Blockchain
MIT pointed out that the development of cryptocurrencies and the rise of new technologies such as blockchain has subjected the economy to a constant process of digitalization, where the creation of new products, tools and solutions that do not exist or are increasingly common. that current systems cannot offer.
However, although blockchain technology has become one of the biggest trends in the technological revolution that financial systems are going through, this technology is far from perfect. In relation to this, MIT highlighted that several of the public and decentralized blockchains that currently exist have problems scaling their transactions.
Although scalability problems in public blockchains are more related to the large number of participants that use them and the balance that exists between decentralization and security, the DCI pointed out that PArSEC overcomes the scalability problem by being a centralized platform. that does not make use of the blockchain.
Instead, the platform uses a database and executes operations in parallel, allowing it to serve as a flexible technical architecture that can execute a wide variety of smart contracts at scale.
PArSEC is capable of processing 118.000 transactions per second (TPS), with an average time of 1,6 seconds per transaction; a fairly high processing capacity compared to public blockchains such as Bitcoin and Ethereum.
Compatible with smart contracts
According to the DCI, PArSEC is an especially useful platform for experimentation because it allows developers to use smart contract languages and functionality without needing to change the underlying transaction processor.
Developers can also use open source tools to deploy smart contracts and applications directly within PArSEC. To ensure the functions offered by this new platform, the researchers commented that they had implemented the Ethereum virtual machine (EVM) to execute the unmodified smart contracts of this blockchain using existing tools.
Continue reading: 93% of the world's central banks explore the development of CBDCs
