The Bank of Canada has made significant $ETH #REX-OSPREYSolanaETF
progress in exploring the technical feasibility of a digital Canadian dollar, also known as a retail central bank digital currency (CBDC). According to their research paper, the proposed system design prioritizes privacy, speed and decentralization, allowing users to hold digital funds directly.
Key Features:
Private Transactions: The system separates personal identity from transaction data, enabling non-registered users to hold funds in self-custodied wallets and transact without sharing their identity.
Bitcoin-like Structure: The design uses "unspent transaction outputs" (UTXOs), similar to Bitcoin, processing transactions in two steps: updating a core ledger and transferring funds from one user's wallet to another.
Enhanced Privacy Measures: Cryptographic techniques like zero-knowledge proofs can potentially obscure transaction amounts from the core infrastructure.
Challenges and Future Directions:
Integration with Existing Infrastructure: Integrating the proposed architecture with existing retail payment infrastructure may require substantial technical upgrades.
Performance and Scalability: Further engineering work is needed to meet production-grade standards during audits and system recovery operations.
Future Research: The Bank of Canada will continue to monitor global retail CBDC developments and publish related research, focusing on preparing for the evolution of payments in Canada and worldwide ¹.
Current Status:
The Bank of Canada has shelved the idea of a retail CBDC for now, shifting its focus to broader payments system research and policy development, while being prepared to ensure Canadians always have a safe and secure supply of public money ².
