The Oliver Wyman Forum in partnership with Amazon Web Servcies (AWS) has issued a white paper proposing a framework to support policy makers as they discuss consideratios around design and evolution of a retail central bank digital currency (CBDC).
An introdution and highlights from the paper folllow, and more details as well as the full paper can be accessed here.
Oliver Wyman Forum research has determined that over 80 countries worldwide are currently researching the possibility of launching a central bank digital currency (CBDC). Proponents of CBDCs believe they have the potential to build a more efficient, secure, and inclusive monetary system, while others often question how this would be achieved. Developing a successful CBDC is a complex undertaking given the interdependencies between policy and technology choices, as well as potential market impacts. And a CBDC may not even be the right solution. With that in mind, the Oliver Wyman Forum in partnership with Amazon Web Services (AWS) has issued a white paper, Central Bank Digital Currency: From Vision to Design. The paper authors don’t make any recommendation as to whether a central bank should introduce a CBDC. Instead, they propose a framework to support policy makers as they mesh policy and technology choices and consider market impacts.
Many studies on this topic tend to fall into two categories: some cover what policy objectives a CBDC may help deliver and its implications on the financial system and the general public, while others cover the different technology (for example, network protocols, transaction processing logic) and architecture (for example, direct, two-tier, synthetic) options for designing a CBDC.
However, the literature on the relationship between policy objectives, technology design choices and competitive dynamics is still relatively limited. Understanding these relationships is critical not only for evaluating and determining whether to launch a CBDC, but also for developing a tailored design. Beyond core technology decisions, system design configurations are impactful in shaping a solution to build in desired system attributes, such as privacy and data sovereignty.
For this reason, the Oliver Wyman Forum and Amazon Web Services (AWS) have decided to collaborate to:
• Highlight policy choices and trade-offs that should be considered early in the design process,
• Assess what technology design choices are particularly sensitive to policy drivers,
• Detail how policy and technology design choices may impact competitive dynamics depending on the available roles for the private sector in the delivery of a CBDC,
• Illustrate how different jurisdictions may opt for different design configurations.
The result of this colloboaration, Central Bank Digital Currency: From Vision to Design, provides a framework for central bankers, technologists, and impacted stakeholders to discuss together whether and how a CBDC solution can be designed and evolve to fit their policy goals.
About the Oliver Wyman Forum The Oliver Wyman Forum is committed to bringing together leaders in business, public policy, social enterprises, and academia to help solve the world’s toughest problems. The Oliver Wyman Forum strives to discover and develop innovative solutions by conducting research, convening leading thinkers, analyzing options, and inspiring action on three fronts: Reframing Industry, Business in Society, and Global Economic and Political Change. Together with our growing and diverse community of experts, we think we can make a difference. For more information, visit www.oliverwymanforum.com