A Retail CBDC Design for Basic Payments: Feasibility Study

Sriram Darba, Cyrus Minwalla, Rakesh Arora and Dinesh Shah

No 2025-09, Discussion Papers from Bank of Canada

Abstract: We frame the wide spectrum of possible system architectures for an online retail central bank digital currency (CBDC) and identify a promising architecture well-suited for basic payments. We select OpenCBDC 2PC, a representative system design that fits this architecture and analyze it using a range of criteria to assess the feasibility of such system designs. Our analysis, augmented with lab experiments, focuses on retail payment systems with two-tier deployment and includes a detailed assessment of non-repudiation, integrity of the monetary supply, privacy, compliance, scalability of performance and resilience of the system state. It suggests that such system designs can be fast and cheap for basic payments, with high privacy, although some areas such as integration with retail payments systems, performance of auditing and resilience of the core system state require further investigation. Our framing highlights other promising architectures for an online retail CBDC, whose analysis we leave as an area for further exploration.

Keywords: Central bank research; Digital currencies and fintech (search for similar items in EconPapers)
JEL-codes: E E4 E42 E5 E51 O O3 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2025-06
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