The pilot project of using the central bank’s digital currency (CBDC), in which the Bank of England (BoE) and the Bank for International Settlements (BIS) participated, has been completed.
The Rosalind project was launched to explore how a universal and extensible API level can connect the infrastructures of the central bank and the private sector within the framework of providing retail payment capabilities using CBDC.
This project also provided for the development of options for the reuse of digital currency. BIS and BoE claim that the initiative to which they have become participants, based on the results of the test implementation, demonstrated that a well-designed API level can effectively interact with a variety of applications of financial institutions that belong to the category of private sector organizations, and with projects of the central bank’s accounting books.
Also, according to the results of the experiment, it was recorded that a set of simple and standardized API functions can support a wide range of use cases.
Based on the results of the pilot project, 33 API functionality was developed. Also, 30 CBDC cases for retail were considered, including peer-to-peer money transfers, small business transactions, as well as payments for goods and services.
The implementation of retail payments using digital currency online, in stores, and offline was tested. Experiments were also conducted using NFC and through interaction with retail outlets, QR codes, mobile phones, smart cards, biometric devices, and intelligent assistants.
The project also provided valuable lessons on many key aspects of the CBDC retail system, such as API design, privacy models, security, standards, offline payments, private sector programmability, and roles and responsibilities in the ecosystem.
Francesca Hopwood Road, head of the BIS Innovation Hub in London, says that within the framework of this project, public institutions and private organizations actively interacted to identify and explore options for using digital currency. She also stated that Rosalind can contribute to the concept of perception of CBDC systems in the context of their application prospects in the retail sector.
Last month, an experiment conducted by the Federal Reserve System of New York and the Central Bank of Singapore testified that the use of digital currency can contribute to improving the process of making cross-border payments.
Industry studies state that the annual volume of payments made with the help of CBDC will reach $213 billion by 2030. By the end of this year, the figure is expected to reach $100 million.
As we have reported earlier, Colombia’s Central Bank Chooses Ripple for CBDC Pilot.