BIS proposes a hybrid model of CBDC amid global concerns
According to Cointelegraph, the advisory group of the Bank for International Settlements (BIS) has proposed an architecture for a retail central bank digital currency (CBDC). This proposal suggests a hybrid approach, where the issuance and management of the CBDC are carried out by the country's central bank, while commercial banks handle consumer services. BIS emphasizes a modular design, focusing on a token-based model to enhance privacy.
The proposed structure of the CBDC also includes account-based models, allowing users to have specific accounts tied to a subject. The authors of the proposal emphasize that privacy can be ensured by separating transaction data from identification information, which remains with private intermediaries. This separation aims to reduce risks and provide more robust privacy protections compared to other models. Despite these assurances, CBDCs are often viewed as conflicting with unregulated finance, with lawmakers, private individuals, and central banks expressing concerns about systemic risks, privacy, and feasibility.
CBDCs have faced significant pushback worldwide. In September, the Bank of Canada suspended the development of a CBDC following public feedback indicating a lack of interest among Canadians in using a central bank digital currency. In the United States, attorney John Deaton, known for representing XRP holders in the SEC lawsuit, has pledged to fight against CBDCs. Deaton characterized the battle against CBDCs as 'a hill to die on,' citing the potential threat to individual freedom posed by a centrally managed digital ledger.
In Missouri, a bill introduced by legislator Rick Brattin on December 1, 2024, aims to ban CBDCs in the state. The bill includes provisions preventing businesses from accepting CBDCs as payment and prohibiting any research or development related to CBDCs. Meanwhile, Member of the European Parliament Sarah Knafo has called for the European Union to abandon CBDCs in favor of Bitcoin (BTC). Knafo criticized the digital euro as an attempt to impose totalitarianism and urged the EU to create a strategic reserve of Bitcoin as other countries continue to accumulate digital currency.
