Aug 22, 2021

1. Objectives of CBDC payment

The CBDC payment system must meet the Bank of England's objectives of maintaining monetary and financial stability. This goal requires that the CBDC payment system be reliable, flexible and secure. In addition, CBDC payment system also needs to be open to innovation and competition and maintain a greater advantages over the private sector. Therefore, CBDC Payments sets the following goals: families and businesses can benefit from this inclusive, innovative, flexible and competitive payment system, and carry out payment activities quickly, efficiently and reliably.

2. Design principles of CBDC

The CBDC design features will be based on the following three principles, for each of which we describe an ideal situation. In the real world, however, it is not possible to maximize the satisfaction of each principle, and there are trade-offs between different principles. Therefore, if we want to introduce a CBDC payment, we need to consider which principles should be applied first and how to balance these principles.

(1) Reliable and flexible

CBDC shall follow the highest standard of network security to prevent network attacks and fraud. In the case of fraudulent payments, a clear policy is needed to specify who is liable for damages. Any CBDC payment system must be able to recover from operational outages, such as hardware or software failures. CBDC shall provide payment service 24/7 with no downtime schedule. If the demand for payments increases substantially, the technology should be able to handle the increased volume. CBDCS are also expected to comply with Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), sanctions and comply with the General Data Protection Regulations (GDPR).

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