There has been done a lot of research around the world in a broad dialogue with companies and general public authorities, in order to discuss how a proposed central bank digital currency concept should function. Those bilateral meetings were focused on how to find out how agencies and private agents could look upon a central digital currency, and what their views are on what range of services, properties and stability the system should have.
They all agree that a CBDC should have at least the following properties: A CBDC system should provide a comprehensive range of services in order for the end-user to derive benefit from it. The CBDC platform should be simple, scalable and flexible so that it can be integrated with other systems in the financial infrastructure. It should be possible to extend and adapt the range of services to existing and emerging needs if cash becomes increasingly marginalized. In addition, a CBDC should enable, for example, remote and online payments, functions which cash cannot manage.
A CBDC also needs to be designed so that everyone, as far as possible, can use it to manage their payments. This means that the CBDC must be widely available and easy to use and hence have a simple and instructive user interface. The aim is for it to be easy to use for groups in society that already find it difficult to manage digital solutions. As this overall target group is large and its various sub-groups have different needs, the work to design a central bank digital currency must take this into account. Furthermore, accepted international standards for accessibility, design, and usability must also be followed.
As instant payments are assumed to become the norm for future payments, a CBDC must fulfill tough requirements for transaction capacity and performance, that is, it must be possible to handle a large number of payments among many different parties efficiently, and it must be possible to settle each individual transaction without delay.
The CBDC should help increase robustness on the payment market. It must be built with the aim of reaching the highest possible accessibility even when disruptions occur. When disruptions occur that put the telecommunications network out of action, the CBDC should be able to function offline. Several e-identification solutions should be available and adhere to an e-identification system. However, it is important that these components are designed in such a way as to be able to complement each other in the event of major crisis situations.
Security and reliability will be particularly important parameters to integrate during the development process of the central bank digital currency platform (CBDCP). To have confidence in the system users and agents needs a reliable technical solution that gives confidence in the system. And on top of their list of requirements is the robust protection against cyber attacks.
This means that architecture, software, hardware, and communication in the technical solution must fulfill the highest security requirements and be thoroughly evaluated during beta and pilot testing phases of a CBDC. The same high standards must be held by suppliers and the future development and management of a CBDC system. The Central bank should put safety and security first. It’s important to develop secure cash that is impossible to counterfeit, and the same must apply to all new development of central bank digital currencies.
The CBDC system must also guarantee user integrity by offering the option of implementing a payment without anyone else apart from the payer and the payee being able to see it (third-party transparency). On the other hand, the system should make it possible to trace transactions, to prevent fraud and money laundering.
The majority of participants felt that an account-based CBDC could rationalize disbursements from agencies to citizens, companies, and organizations and make agencies less dependent on the banking system. The need for payments via registered letter and cash disbursements could also be reduced with a CBDC. The possibility to more easily trace transactions during special circumstances with the CBDCP and to have a greater knowledge of who the customer is, was something interviewed agencies felt was a good thing. In summary, Individuals, agencies, and companies are largely in line with the views of issuing a central bank digital currency and that a CBDC should have at least the above-mentioned properties included from the start.
