Today the Eastern Caribbean Central Bank (ECCB) announced that its central bank digital currency (CBDC) pilot has hit a technical issue causing an outage. The ECCB’s DCash project launched at the end of March 2021 and is one of the first large-scale CBDC pilots and the first multi-national one, given the ECCB spans eight Caribbean islands.
Users do not require a bank account to participate and they can make payments and transfers in real-time without fees.
The technical issues have meant the payment system is now offline to complete upgrades. Some transactions have failed, and the central bank says it will honor these when the system comes back online. It was keen to emphasize that digital currency balances held in wallets remain secure.
“The current service interruption is unfortunate but is providing a useful opportunity for testing the resilience of our platform ahead of commercial deployment and integration,” said the central bank in a statement. It’s a fair comment as the whole point of a pilot program is to iron out issues before launch. However, the systems are using real money.
A key criticism of CBDC is that if the network goes down, the entire country’s citizens can’t use their money. However, depending on the design, some smaller transactions can persist in some cases. Certain regions, including the Caribbean and Japan, are particularly keen to ensure offline usage because of weather events and earthquakes. However, DCash requires an internet connection to function.
Bitt is the central bank’s technology partner. It’s also the provider for Nigeria’s eNaira CBDC project, which is currently being piloted. One question is how similar the setups are for the two countries and whether any vulnerability in the DCash system could be exploited in Nigeria. We’ve contacted Bitt, but we don’t expect a response at this time, given the delicateness of the issue.
Certain service providers such as Bitt, G+D, ConsenSys and Accenture are CBDC partners in multiple jurisdictions, which means that potential future outages could impact more than one country where the glitch results from technical bugs or design issues.