COTI Proposes CBDC-Powered Decentralized Marketplace for RWA’s in Bank of Israel’s Digital Shekel Challenge
Today, the Bank of Israel concluded its Digital Shekel Challenge, with final presentations and awards at the Tel Aviv Stock Exchange. The COTI team presented a cutting-edge CBDC-powered decentralized marketplace for real-world assets (RWAs) to the judging panel.
As the only blockchain project to advance to the final stages of the Digital Shekel Challenge, the COTI team shared a stage with the likes of PayPal, Fireblocks and a dozen other companies specializing in fintech, privacy, and networking.
The Challenge!
The overarching goal of the challenge was to create a two-tier model for issuing a CBDC, using an API layer to provide a set of functionalities for payment service providers. At the same time, the solution must connect end users to a broad and innovative range of services while maintaining user privacy and optimizing for security and reliability.
COTI’s submission took the form of a decentralized marketplace for event tickets, designed to bridge the gap between traditional banking systems and web3. It enables counterparties to conduct cross-border transactions using their local currency, with the Digital Shekel serving as the mediating currency. The solution took inspiration from Icebreaker, a cross-border CBDC payment system developed by the BIS (Bank for International Settlements).
Deploying a smart contract-based marketplace removed the need for intermediaries and limited fraud while lowering transaction fees and conversion rates. While COTI’s demo focused on concert tickets, the concept could be applied to numerous global markets using a CBDC to streamline asset exchange.
COTI’s demo for the Digital Shekel Challenge can be viewed here: https://youtu.be/D1VqgRjOVP4?feature=shared
The Need for Privacy-by-Design in CBDCs
There is widespread interest in CBDCs, with three countries having launched one so far, another 44 in the trial phase and a further 20 in active development. COTI advocates for CBDC implementations that strike a balance between transparency and privacy, enabling commerce to flourish without the risk of governmental overreach.
COTI’s contribution to the Bank of Israel Digital Shekel Challenge aimed to demonstrate how privacy-by-design can secure the growth of open digital marketplaces while respecting user privacy and financial freedom. Watch the demo in detail here.
The privacy-focused blockchain developed by COTI offers advanced features to hold and securely transact with CBDCs. Its fast and lightweight privacy solution uses a novel implementation of garbled circuits, offering significantly lower running costs than other privacy technologies and can run on any device including mobile. The technology has the potential to enhance CBDCs as a secure means of payment.
COTI will now turn its attention to the development of further use cases that tackle privacy concerns within CBDC design.
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