Thought  Leadership

February 25, 2022

The technical solutions need to be made interoperable to allow for intra-border and cross border CBDC payments. Systems should also allow for variations in terms of permissions. A permissioned system will mean that certain functions and information be restricted/reserved for the use of certain stakeholders, or different stakeholders have access to different set of information in the register.

February 20, 2022

CBDC system should be able to generate insights relevant for the Central Bank’s macroeconomic monitoring.One application will be ‘nowcasting’ that can provide important insights into likely outcomes for key economic indicators after CBDC introduction. For example, information on economic reactions to changes in interest rates.

February 15, 2022

The CBDC system should provide strong privacy protection for transaction amounts and identities while ensuring proactive compliance (e.g. conformance with account balance or payment limits) and retroactive compliance like retention and disclosure of confidential information in an investigation, for example- maintaining differing levels of payment anonymity subject to regulatory requirements.

February 10, 2022

Central Banks will employ authorised third parties to perform customer due diligence while retaining control of the system. It will also be important for the Central Banks to provide some information to the public while third parties are responsible for bilateral communications with individual customers.

February 6, 2022

Inclusion and user friendliness can be fulfilled by incorporating an offline payment mode. The solution should allow for the funds to be transferred in advance and stored locally, and the payment/peer-to-peer transfer to occur when the two parties are in close proximity to one another.

January 20, 2022

CBDC payments need to be immediate and final. The system should ensure irreversibility and irrefutability of transactions. Access to the CBDC money to the recipient should be immediate after completion of a payment transaction.

January 20, 2022

CBDC will need to be compliant with the laws of the concerned jurisdiction. Factors like customer’s identity verification, fulfilment of KYC requirements and data protection must be considered.

January 14, 2022

CBDC adoption will be driven by its usefulness to consumers and acceptance by merchants.Therefore, strategies for adoption must consider both and be tailored to the diverse payment landscapes. A forward-looking approach is required to assess consumer & merchant needs, taking into account the present as well as the future of payments.

January 12, 2022

A CBDC is an ongoing claim on Central Bank. The balance sheet should clearly reflect: • the number of CBDC units issued and in use • the number of units that have been withdrawn from circulation

January 11, 2022

A sudden conversion of private bank deposits to CBDC units in a large scale can cause financial instability. The conversion needs to be controlled in a manner that is desired to retain stability and allow for continuous monitoring while the shift happens.

January 10, 2022

CBDC will function as legal tender and solutions must be able to support that. CBDC units must be easily accessible, relatively simple and cheap to use. The solution must not be technically complicated and require the purchase of advanced or costly additional equipment at any level of implementation (especially for the use of merchants and consumers).

January 1, 2022

Central Bank must always have absolute control over the core CBDC system, including the limitation of Central Bank’s liability and reputational risk. Additional measures will be required to limit risks to users and society. Central Bank will use DLT and third-party solutions to control the core system which comprises of the issuance and destruction of CBDC units, IT architecture for components like the register/account system and system rules/protocols.