Monday 26 September 2022
Home / none / White House OSTP department analyzes 18 CBDC design choices for the US

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 United States.

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:

“It is possible that the technology underpinning a permissionless approach will improve significantly over time, which might make it more suitable to be used in a CBDC system.”

However, the analysis assumed there is a central authority and a permissioned CBDC system.

Helping policymakers decide on the ideal U.S. 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 topics including 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 U.S. CBDC system highlighted the report’s inclination toward an off-ledger, hardware-protected system. Upon the launch of a United States dollar 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 OSTP recommended monitoring and regulation while weighing the environmental and energy impact of crypto assets in the United States.

The related OSTP report highlighted that crypto assets use approximately 50 billion kilowatt-hours of energy per year in the U.S., which is 38% of the global total, while adding:

“Noting direct comparisons are complicated, Visa, MasterCard, and American Express combined […] consumed less than 1% of the electricity that Bitcoin and Ethereum used that same year, despite processing many times the number of on-chain transactions and supporting their broader corporate operations.”

The report further noted the high energy consumption of proof-of-work (PoW) staking in crypto assets.

Original Article

About Jude Savage

Check Also

Reversible transactions could mitigate crypto theft — Researchers

Stanford University researchers have come up with a prototype for “reversible transactions” on Ethereum, arguing it could be a solution to reduce the impact of crypto theft. In a Sept. 25 tweet, Stanford University blockchain researcher Kaili Wang shared a run down of the Ethereum-based reversible token idea, noting that at this stage it is not a finished concept but more of a “proposal to provoke discussion and even better solutions from the blockchain community,” noting: “The major hacks we've seen are undeniably thefts with strong evidence. If there was a way to reverse those thefts under such circumstances, our ecosystem would be much safer. Our proposal allows reversals only if approved by a decentralized quorum of judges.”The proposal was put together by blockchain researchers from Stanford, including Wang, Dan Boneh, Qinchen Wang, and it outlines “opt-in token standards that are siblings to ERC-20 and ERC-721” dubbed ERC-20R and ERC-721R. However, Wang clarified that th..

Leave a Reply

Your email address will not be published. Required fields are marked *