BIS publishes guidance on use of CBDCs for offline payments
11 May 2023 Switzerland
Image: AdobeStock/gmcphotopress
The Bank of International Settlements has published analysis through its Innovation Hub of how central bank digital currencies (CBDCs) could function for payments transactions conducted offline.
This study evaluates how fund transfers using CBDCs could be made without access to the Internet, a consideration that may be essential for resilience planning in stress situations and for enabling CBDC payments in remote locations or where there is risk of Internet dropout.
The study is led by the BIS Innovation Hub’s Nordic Centre through its Project Polaris, which focuses on resilience and cybersecurity considerations around CBDC adoption.
To disseminate these findings, the BIS Innovation Hub has released a handbook, written in collaboration with Consult Hyperion, that provides guidance to central banks and other stakeholders working on CBDC projects and is intended to inform decision-making, architecture, design, implementation planning and investments. It will also address long-term change and operational considerations.
Beju Shah, head of the BIS Innovation Hub Nordic Centre, says: “CBDC systems, like all digital payment systems, must work for everyone in society, whenever and wherever individuals and businesses need them. The ability to pay when offline could ensure this is achieved by providing a layer of resilience, as well as supporting inclusion, accessibility and privacy objectives.
“Implementing offline payment capabilities will require a deeper understanding of the technologies, security threats, risks and mitigating measures, as well as design criteria for privacy, inclusion and resilience. This handbook is intended as a guide to central banks starting this work.”
This study evaluates how fund transfers using CBDCs could be made without access to the Internet, a consideration that may be essential for resilience planning in stress situations and for enabling CBDC payments in remote locations or where there is risk of Internet dropout.
The study is led by the BIS Innovation Hub’s Nordic Centre through its Project Polaris, which focuses on resilience and cybersecurity considerations around CBDC adoption.
To disseminate these findings, the BIS Innovation Hub has released a handbook, written in collaboration with Consult Hyperion, that provides guidance to central banks and other stakeholders working on CBDC projects and is intended to inform decision-making, architecture, design, implementation planning and investments. It will also address long-term change and operational considerations.
Beju Shah, head of the BIS Innovation Hub Nordic Centre, says: “CBDC systems, like all digital payment systems, must work for everyone in society, whenever and wherever individuals and businesses need them. The ability to pay when offline could ensure this is achieved by providing a layer of resilience, as well as supporting inclusion, accessibility and privacy objectives.
“Implementing offline payment capabilities will require a deeper understanding of the technologies, security threats, risks and mitigating measures, as well as design criteria for privacy, inclusion and resilience. This handbook is intended as a guide to central banks starting this work.”
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