According to Cointelegraph, the consultative group of the Bank for International Settlements (BIS) has put forward a proposal for a retail central bank digital currency (CBDC) architecture. This proposal suggests a hybrid approach where the issuance and governance of the CBDC are managed by a country's central bank, while commercial banks handle consumer-facing services. The BIS emphasizes a modular design focusing on a token-based model to enhance privacy.
The proposed CBDC framework also accommodates account-based models, allowing users to have specific accounts linked to an entity. The authors of the proposal highlight that privacy can be ensured by separating transaction data from identity information, which remains with private intermediaries. This separation aims to mitigate risks and provide stronger privacy protections compared to other models. Despite these assurances, CBDCs are often viewed as contrary to permissionless finance, with concerns about systemic risks, privacy, and feasibility being raised by lawmakers, individuals, and central banks.
CBDCs have faced significant opposition globally. In September, the Bank of Canada halted its CBDC development 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 oppose CBDCs. Deaton described the fight against CBDCs as "a hill to die on," citing the potential threat to individual liberty posed by a centrally managed digital ledger.
In Missouri, a bill introduced by lawmaker Rick Brattin on December 1, 2024, aims to ban CBDCs in the state. The bill includes provisions to prohibit businesses from accepting CBDCs as payment and to prevent any research or development related to CBDCs. Meanwhile, European Parliament member Sarah Knafo has urged the European Union to abandon CBDCs in favor of Bitcoin (BTC). Knafo criticized the digital euro as an attempt to introduce totalitarianism and encouraged the EU to establish a Bitcoin strategic reserve, as other nations continue to accumulate the digital currency.
