In developing CBDC's 12 issues have arisen that require resolution prior to roll out and it's left many stumped which is currently hindering the development and roll out of CBDC's.
Singapore's Monetary Authority is teaming up with the International Monetary Fund, world bank including Amazon, master card and other players to put out a competition to the broader cryptocurrancy community to help ressolve the problems.
The competition is open until November this year and entrants will be able to showcase their products at Singapore's Fintech festival.
The focus seems to be greater than just creating a stable coin and banks want a full use digital currency that goes beyond a simple smart wallet powered by your phone.
I had the thought that this might be a great contest for @blocktrades to enter as well as Hive possibly? Block trades has been developing Hive and building for a long time with extensive experience and knowledge.
There are great developers on the Hive block chain and the growth of @leofinance also shows great tech skills that may have already ressolved some of these issues.
A great way to build publicity and show the world that Hive has the skills and ability to be a great (already is) block chain.
Competition details can be found Here
What are your thoughts?
The 12 Issues
(Link provided below)
Problem Statement #01յ New Functionalities vs Inclusivity
Can a retail CBDC system be embedded with additional functionalities beyond a basic
transfer of value without requiring users to use smartphones (or other
expensive/complex hardware)? How might this improve the efficiency and effectiveness
of Government-to-Person payment programmes in the context of an economy with low
levels of digital penetration?
Problem Statement #02յ Security vs Accessibility
Can the design of a retail CBDC system be highly secure for users (e.g. one that
prevents unauthorised uses and illicit transactions) without compromising the ease of
use? Would such a system be able to cater to the varied needs of the elderly, minors,
and those with disabilities?
Problem Statement #03յ Availability vs Risk of Disputes
Can offline transactions be enabled in areas with no or limited internet connectivity?
What safeguards against double-spending and counterfeiting can be embedded to
minimise disputes related to offline payments?
Problem Statement #04յ Recoverability vs Anonymity
In the event of theft, damage or loss of a wallet, card or instrument, can a retail CBDC
system adequately trace transactions, limit the loss or support the recovery of lost
funds without compromising user identity?
Problem Statement #05յ Widespread Frictionless Use vs Control
Are there technological features that can be incorporated into a retail CBDC solution to
minimise the risk of significant and abrupt outflows from bank deposits to the CBDC,
while ensuring that the use of the CBDC is as seamless as possible? Are there technical
designs that would allow a retail CBDC to be used for cheaper and faster cross-border
payments, and yet mitigate the risk of generating more volatile and destabilising capital
flows between countries?
If the proposed technological solution is dependent on or designed for particular policy
choices by central banks, participants should elaborate on their assumptions in the
submission.
Problem Statement #06յ Personal Data Protection vs System
Integrity
Can the retail CBDC solution protect personal and consumer transactions data, while
allowing for monitoring, detection and prevention of illicit activities on the network (e.g.
money laundering /terrorism financing, fraud, scams and corruption)?
**Problem Statement #07յ **Expanding Access to Financial Services
vs Guarding against Data Monopolies
How can the design of a retail CBDC solution allow participating firms to harness
payment data to enable the offering, customising, or improving the pricing of financial
services (e.g. credit, insurance) to users, while avoiding the undesirable effects of data
monopolies on consumer welfare over time? How might users retain control over use of
their data?
Problem Statement #08յ Coexistence vs Integration Complexity
How can a retail CBDC solution allow financial institutions to distribute CBDCs to the
end user in a manner that leverages existing national payment rails such as a country’s
payment systems, while keeping participation cost competitive at minimal disruption?
How can it process payments between users on different payment systems without
introducing the need to involve additional intermediaries, or needing custom integration
for onboarding?
Problem Statement #09յ Decentralisation vs Accountability
How can a retail CBDC infrastructure be made more resilient to single points of failure?
Can concentration risks be minimised through decentralisation? How can we develop a
safe, stable and sustainable governance model for such decentralised infrastructure
with clear lines of responsibility and accountability? How can the interests of citizens
and market participants as well as financial stability be safeguarded in the event of a
failure of such an infrastructure?
Problem Statement #10յ Extensibility vs Operational Resilience
Can a retail CBDC infrastructure be flexible yet robust, allowing for computationally
intensive use of programmable functions and addition of new capabilities without
incurring additional overheads in terms of cost, operational performance or introducing
system vulnerabilities?
Problem Statement #11յ Privacy vs Performance
Can a retail CBDC infrastructure incorporate privacy preserving capabilities while
remaining high performing, with fast response time, low latency and scalability to
support large deployment?
**Problem Statement #12յ **Interoperability vs Standardisation
Standardisation reduces overhead and integration cost. However, international
standardisation will require significant coordination. How can interoperability be
achieved across different instruments of digital money and across different
technologies without a commonly accepted standard? Retail CBDCs in different
jurisdictions would need to be interoperable with each other, as well as with nonCBDC
systems and non-CBDC forms of digital money to enable better, cheaper, faster
payments both cross-border and domestically
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