Yesterday the BIS Innovation Hub published a design guide for offline central bank digital currencies (offline CBDC) as part of Project Polaris. It involved a dozen vendors presenting their solutions to several central banks. One of the solution providers was Google, although the BIS document does not discuss Google’s offering.
Google Pay wallets already support offline transactions, both for card based payments and in India for UPI payments. It allows a limited number of offline transactions before an internet connection is required. In India, it’s not just customers that can be offline. It also supports offline merchants.
Offline payments are perceived as riskier. Online transactions can be verified and checked for money laundering and double spending, whereas offline ones can’t. One option is to use secure smart cards similar to prepaid cards for offline CBDC. Another is requiring smartphones to connect to the internet occasionally.
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