Office of Science and Technology Policy Layout 18 CBDC Designs for White House
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Six broad categories were used to analyze the technical aspects of the CBDC’s 18 design options: participants, governance and security; transactions, information and corrections.
At the direction of Joe Biden, the Office of Science and Technology Policy released a report analyzing design options for 18 central bank digital currency (CBDC) systems that could be implemented in the United States.
A technical analysis of 18 CBDC design options was conducted under six broad categories: participants, governance and security, transactions, information and regulation. OSTP anticipates the technical complexities and practical limitations of building a permissionless system controlled solely by a central bank.
The technology behind CBDC will improve over time
“The technology behind unauthorized access can evolve over time. This may make a CBDC program more appropriate.” The analysis assumes that there is a central authority and that the CBDC system is mandated.
The OSTP report helped policymakers decide on the best US CBDC system. It highlighted the inclusion of third parties in two design options under the “Participant” category: Interoperability and Transport Layer.
The report looked at governance factors such as access level and identity privacy, remediation and permissions.
Programmability of offline events
Other important aspects that OSTP asks policymakers to consider include encryption (for security), transaction privacy and programmability of transactions offline (for transactions), data model history and data interchangeability (for data), holding limits and adjustments to balances and transactions (for transactions).
Technical assessments of the US CBDC system revealed that the report favors an off-the-books, hardware-secured system. The report highlights the trade-offs that policymakers have made in finalizing planning decisions for US CBDCs.
OSTP recommended regulation and supervision on 8 September. It also weighed the energy and environmental impacts of cryptocurrencies in America.
The OSTP report on cryptocurrencies highlighted that they consume about 50 billion kilowatt-hours of energy annually in the United States, which is 38% of the world’s total.
Note that direct comparisons can be complicated, Visa MasterCard and American Express combined used less than 1% of the electricity that Bitcoin or Ethereum used in the same year, despite processing far more on-chain transactions and supporting larger business operations.
In addition, the report stated that proof of work (PoW) and investment of crypto-assets consumed a lot of energy.