Central banks outline key technical priorities for CBDC architecture
Central banks in the Americas, guided by the Bank for International Settlements (BIS), have identified important technical priorities for the potential architecture of Central Bank Digital Currencies (CBDCs). This information comes from a report by the Consultative Group on Innovation and the Digital Economy (CGIDE), which serves as a valuable resource for countries exploring or implementing CBDC solutions.
Collaboration among central banks
In a collaborative effort, central banks are defining crucial technological aspects for a future proposal on a CBDC proof of concept. The proposal takes into account technical requirements such as interoperability, scalability, user-centric design, security, and data privacy. It aims to provide general guidance to central banks involved in CBDC research or development, without taking a specific policy stance on CBDC design, issuance, adoption, or technical standards.
The initial focus of the CGIDE technical task force (TTF) is programmability features related to clearing and settlement. The selected technical requirements within each category were determined through a survey among TTF members, with each central bank choosing based on their policy objectives.
Striking a balance between privacy and transparency
This announcement builds upon an update about Project Tourbillon on Nov. 29, led by BIS’s innovation hub. Notable progress has been made in finding a balance between privacy and transparency in CBDCs. The final report from Project Tourbillon presents a nuanced approach to handling privacy in CBDC transactions. It proposes a system that allows users to make payments without revealing personal information to merchants or other parties involved.
Hot Take: Achieving Technological Priorities for CBDCs
Central banks in the Americas, with the guidance of BIS, are prioritizing key technological aspects for the architecture of Central Bank Digital Currencies (CBDCs). This collaborative effort aims to provide general guidance to central banks involved in CBDC research or development. By focusing on interoperability, scalability, user-centric design, security, and data privacy, the proposal sets the foundation for future CBDC implementations. The CGIDE report serves as a valuable resource for countries exploring CBDC solutions. Additionally, progress has been made in finding a balance between privacy and transparency in CBDC transactions, allowing users to make payments without compromising personal information.
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