White House OSTP department analyzes 18 CBDC design choices for the US
As directed by the President of the United States, Joe Biden, the Office of Science and Technology Policy (OSTP) submitted a report analyzing the design choices for 18 central bank digital currency (CBDC) systems for possible implementation in the US.
The technical analysis of the 18 CBDC design choices was made across six broad categories — participants, governance, security, transactions, data and adjustments. The OSTP foresees technical complexities and practical limitations when trying to build a permissionless system governed by a central bank, adding:
However, the analysis assumed there is a central authority and a permissioned CBDC system.
Helping policymakers decide on the ideal US CBDC system, the OSTP report highlighted the implications of including third parties in the two design choices under the ‘participants’ category — transport layer and interoperability. For governance, the report weighed various factors related to permissioning, access tiering, identity privacy and remediation.
Other important factors OSTP wants policymakers to consider include cryptography and secure hardware (for security), signatures, transaction privacy, offline transactions and transaction programmability (for transactions), data model and ledger history (for data) and fungibility, holding limits and adjustments on transactions and balances (for transactions).
The technical evaluation for a US CBDC system highlighted the report’s inclination toward an off-ledger, hardware-protected system. Upon the launch of a US CBDC, the report will eventually highlight the various trade-offs policymakers decided to make when finalizing the design choices.
Related: White House publishes ‘first-ever’ comprehensive framework for crypto
On Sept. 8, the
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