When the Bank of England issued a discussion paper on central bank digital currencies (CBDC) in 2020, it outlined a so-called platform model. This is a centralized solution in which the Bank would operate a payment ledger that records all transactions, with payment service providers (PSPs) taking on the customer-facing distribution role for the digital pound.
Yesterday the minutes of September’s first Technology Forum meeting were shared, including two potential alternative models. Instead of the bank holding a record of every payment amount, it might just record the gross transactions with PSPs in a ‘pooled model’. And there could be a variant of the pooled model to allow delayed net settlement by the PSPs, even though customer payments would be real-time.
Some of the meeting attendees suggested an alternative model which is anonymous and hence more cash-like without either the PSPs or the Bank keeping a ledger. We recently wrote about a paper along these lines published by the Swiss National Bank.
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