Minimum of 30,000 transactions per second needed for digital pound: BoE and Treasury

Yesterday the Bank of England and UK Treasury issued a consultation paper on the digital pound. While the paper concluded it is too early to determine whether to introduce the digital pound, the BoE and Treasury are “convinced” that preparatory work is needed.

In this respect, a”Technology Working Paper‘ was also published alongside the consultation paper. Here the BoE and Treasury explore in more detail the technical requirements that the digital pound should meet in order to be successful as a retail payment infrastructure.

Transaction Throughput

According to the BoE’s estimate, a minimum of 30,000 transactions per second may be necessary to support the digital pound’s functionality. This throughput would currently support all retail transactions in the UK on any given day. However, as innovation continues and new use cases for CBDCs emerge, the demand for a higher transaction throughput may increase. As a result, the BoE said that it will also consider exploring capabilities of up to 100,000 transactions per second.

In addition to transaction capacity, the paper states that the digital pound must also be able to process and settle transactions quickly. According to the paper, a processing time of less than one second would be necessary for the digital pound to meet performance requirements in terms of speed and certainty.

Environmental Impact

The paper also stressed that any infrastructure used for a digital pound would need to be environmentally friendly. At the very least, it would have to “be designed to meet the energy efficiency targets for existing payment infrastructure”.

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The full paper on the technical design of the digital pound can be accessed here.