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Security and convenience of a central bank digital currency

Charles Kahn () and Francisco Rivadeneyra

No 2020-21, Staff Analytical Notes from Bank of Canada

Abstract: An anonymous token-based central bank digital currency (CBDC) would pose certain security risks to users. These risks arise from how balances are aggregated, from their transactional use and from the competition between suppliers of aggregation solutions. The central bank could mitigate these risks in the design of the CBDC by limiting balances or transfers, modifying liability rules or imposing security protocols on storage providers.

Keywords: Central bank research; Digital currencies and fintech; Financial system regulation and policies; Payment clearing and settlement systems (search for similar items in EconPapers)
JEL-codes: E42 G21 (search for similar items in EconPapers)
Date: 2020-10
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-pay
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