According to central banks’ digital currencies, or CBDCs, blockchain technology is not required, according to executives from major European central banks.
Thomas Moser, alternate board member of the Swiss central bank, and Martin Dell of the Deutsche Bundesbank discussed the state of the central bank’s digital currencies at the European Blockchain Virtual 2020 conference on 21 September.
During an online discussion, it seems that Diehl and Moser agree that global retail CBDC projects do not need blockchain, for a number of reasons.
Moser said that the most important use cases for blockchain are focused on giving trust when the company does not have a central party. “Like Bitcoin, I think this is a very good use case for blockchain,” said the CEO.
However, the expert further said that the involvement of the central bank makes it unnecessary to use the central bank’s retail currencies since the trust is given by the central party. Moser sa:
But if you have a central bank, it is a central party. And if you trust this central party, then I do not think it is easy to think that you need a blockchain. ”
Speaking to Cointelegraph, Moser stressed that blockchain can still be useful to CBDC wholesalers. Unlike digital currencies for central banks, the central bank’s digital currencies are limited to commercial banks, clearing houses or other organizations that will normally have access to central bank reserves. According to a study by R3, a large blockchain company, as of May 2020, cryptocurrency production was only carried out with wholesale digital currencies.
Moser also indicated that he is working on research work to propose commercial coins for live streaming without retail. According to Moser, the upcoming CBDC project will preserve the privacy of transactions – the main function of cash – through the use of blind signature technology, not blockchain. According to the headline, the article was written with cryptography and technology expert David Cham and Christian Grothoff.
Diehl, head of payment system analysis at the Deutsche Bundesbank, noted that blockchain technology is not important to the CBDC, citing examples of two major CBD initiatives such as the Chinese digital yuan and the e-krone for Sweden. “Neither the Swedish Riksbank nor the People’s Bank of China seem to use blockchain, so there is no need for a blockchain,” said the CEO.
Deal also noted that there is no point in implementing generic or unauthorized blockchains for CBDC systems. By offering a network of major cryptocurrencies such as Bitcoin (BTC) and Ether (ETH), the public blockchain can not be owned by any central party and is completely open to anyone who can join and participate. “I can not imagine unauthorized use of blockchain in formal blockchain transactions,” Deal said.
As reported, the Chinese digital currency, also known as digital yuan or digital currency electronic payment (DCEP), does not use blockchain technology. However, according to Cypherium CEO Sky Guo, DCEP was able to implement the infrastructure for China’s national blockchain project, the Blockchain Service Network.