Function before Form: Assumptions to Avoid when Designing Retail CBDC Systems – New Whitepaper by Crunchfish
Retail CBDC systems are challenging to implement in practice. There are many features of cash that are desirable to replicate in digital form, such as the ability to pay offline and with privacy. This whitepaper highlights the problems of making premature design decisions on form without realizing its limiting consequences on the function and presents alternatives that are more suited for delivering the desired function. Defining function before form is of paramount importance for a successful implementation of CBDC in practice.
This whitepaper discusses two pre-mature design decisions on form for retail CBDC systems that has negative consequences on function. First, the assumption of representing retail CBDC as a digital banknote. A layer-2 approach which improves privacy and has better ability to pay with exact amounts is discussed in the whitepaper. The second example of pre-mature assumptions on form relates to hardware-based secure elements. The whitepaper discusses trusted client applications in virtual secure elements as a better form for implementing the retail CBDC function. Find the whitepaper on this link.
This Crunchfish whitepaper is also published today on pages 12-15 in Currency Research bulletin Central Bank Payment News, July 2024 edition.
“Crunchfish argued early that it is not ideal to implement retail CBDC for offline payments in the form of a digital banknote. We also believe in delivering trust in mobile devices for offline payments by means of virtual secure elements, in contrast to using hardware-based secure elements. I believe Crunchfish will be proven right on both counts", says Joachim Samuelsson, Crunchfish’s CEO.
For more information, please contact:
Joachim Samuelsson, CEO of Crunchfish AB
+46 708 46 47 88
joachim.samuelsson@crunchfish.com
This information was provided by the above for publication on 29th July 2024 at 16:15 CET.
Västra Hamnen Corporate Finance AB is the Certified Adviser. Email: ca@vhcorp.se Telephone +46 40 200 250.
About Crunchfish – crunchfish.com
Crunchfish is a deep tech company developing a device-agnostic generic trusted client application platform for offline payments, tokenized card payments as well as other mobile client / server systems. Crunchfish has been listed on Nasdaq First North Growth Market since 2016, with headquarters in Malmö, Sweden and with a subsidiary in India.
