Sriram Darbha is a Payments Technical Consultant in the Payments Policy Strategy and Research team. His work covers system design and experimentation in the areas of tokenization, digital currencies and wholesale central bank money. Earlier, he has led the research and analysis of core technical architectures of retail CBDC systems.
As interest in tokenization grows, so too does the focus on the design of tokenized systems. Different approaches—such as centralized or decentralized systems—could achieve similar outcomes. But the choice of design involves consequential trade-offs that shape how the entire ecosystem evolves.
We outline possible system architectures for an online retail central bank digital currency (CBDC) and identify one well-suited for basic payments. We analyze OpenCBDC 2PC, a representative system, finding such designs to be feasible, although some areas require further investigation. Our framing highlights other promising architectures for a retail CBDC.
Our paper contributes to the discussion about the utility of stablecoins for retail payments through an objective, evidence-based approach that compares stablecoins with traditional retail payment methods. The paper also provides insights that could be useful in the design of central bank digital currencies.
A variety of technology designs could support retail central bank digital currency (CBDC) systems. We develop five archetypes of CBDC systems, outline their characteristics and discuss their trade-offs. This work serves as a framework to analyze and compare different designs, independent of vendor, platform and implementation.
Privacy is a key aspect of a potential central bank digital currency system. We outline different technical choices to enact various privacy models while complying with the appropriate regulations. We develop a framework to evaluate privacy models and list key risks and trade-offs in privacy design.
In this note, we highlight a range of technical options and considerations in designing a contingent system for a central bank digital currency (CBDC) in Canada and explore how these options achieve stated public policy goals.
