Nordic Innovation Center Invites Technology Suppliers to Create Offline Capabilities for CBDC

02/21/2023 11:37 • Tech Trends • 108 views

It is reported that the Nordic department of the Innovation Center of the Bank for International Settlements is inviting technology suppliers to submit the idea of implementing offline functions in the future central bank digital currency. Many central banks considering the potential implementation of CBDC consider the offline function as an important requirement for reasons including flexibility, crisis, financial inclusion, cash similarity, privacy, accessibility, etc. By inviting technology suppliers to submit their suggestions, the Nordic Center hopes to guide the central bank to understand the applicability, applicability and readiness of various available solutions, risks and trade-offs, and the maturity of technology.

BIS Innovation Center invites suppliers to submit offline CBDC technology

Analysis based on this information:

The Bank for International Settlements (BIS) has announced that the Nordic department of their Innovation Center is soliciting proposals from technology suppliers on how to introduce offline capabilities to a future central bank digital currency (CBDC). CBDC refers to a digital form of a nation’s fiat currency that is issued and backed by its respective central bank. Many central banks, including those in China, Sweden, and the UK, are exploring the potential of CBDCs as a means of reducing costs, improving financial inclusion, and enhancing the effectiveness of monetary policy.

One of the key issues that central banks must consider when developing CBDCs is whether to implement offline functionality. Offline capabilities allow users to conduct transactions even when there is no internet or cellular connectivity. There are several reasons why central banks might consider offline functionality essential, including reducing the reliance on physical cash, ensuring financial inclusion for those without reliable internet access, and enhancing privacy and security.

By inviting technology suppliers to submit their proposals, BIS’s Nordic Innovation Center hopes to gain a better understanding of the different solutions available for introducing offline capabilities to a CBDC. Additionally, the Center aims to assess the readiness and maturity of the various technologies, as well as the risks and trade-offs associated with each option.

Central banks have a considerable challenge in developing a successful CBDC that meets the requirements of all stakeholders; however, the Nordic Innovation Center’s invitation to technology suppliers is a significant step in the right direction. By leveraging the expertise and creativity of technology suppliers, central banks can identify and develop solutions that meet the needs of their constituents.

In conclusion, the Nordic Innovation Center’s invitation to technology suppliers for CBDC’s offline functionalities is a crucial step in advancing the development of central bank digital currencies. Its aim to evaluate and understand the different available solutions, risks, and trade-offs offer a glimmer of hope for the CBDC’s future success, and as such, it is a development worth monitoring.

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