Central banks, including BIS, discuss design aspects for CBDC systems, focusing on privacy concerns
The financial industry is abuzz with discussions surrounding central bank digital currencies (CBDCs), and a key player in these conversations is the Bank for International Settlements (BIS), along with seven central banks: the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Board of Governors of the Federal Reserve System, Sveriges Riksbank, and the Swiss National Bank.
These financial institutions have published papers on the legal issues and system design for retail CBDCs, shedding light on potential implications for the industry. The debate centres around the choice between a centralised and decentralised model for CBDC system design.
One proposed model is the hub-and-spoke system, where updates are controlled by the central bank, but data ownership is distributed. This model offers a balance between centralised control and decentralised autonomy. Another alternative is a peer-to-peer model, where the authority for updates is shared among participants.
However, no decision has been made yet on the specific system design for retail CBDCs. The ongoing discussions are crucial for determining the future of digital currencies in the financial sector.
The BIS, in collaboration with the aforementioned central banks, is delving deep into the legal and system design issues for retail CBDCs. The discussions provide valuable insights for professional subscribers seeking deeper understanding of the industry.
Sources such as dekzer007 and Composite Ledger Insights offer further insights into the CBDC system design discussions. As the industry evolves, it is essential to stay informed about these developments.
It is important to note that no specific central bank has been identified as currently favouring a decentralised model for implementing a retail CBDC system. The decisions will be made in due course, as the industry continues to grapple with the complexities of CBDC system design.
In conclusion, the future of CBDCs is shrouded in intrigue, with the debate on system design being a key factor. Professional subscribers can gain access to exclusive analysis, complete articles, and early updates on these developments by subscribing to the service. Stay tuned for more updates on this exciting frontier of the financial industry.
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