Nordic Center Seeks Offline Function for Central Bank Digital Currency

02/21/2023 11:37 • Blockchain Buzz • 128 views

It is reported that the Nordic department of the Innovation Center of the Bank for International Settlements is inviting technology suppliers to submit the idea of implementing offline functions in the future central bank digital currency. Many central banks considering the potential implementation of CBDC consider the offline function as an important requirement for reasons including flexibility, crisis, financial inclusion, cash similarity, privacy, accessibility, etc. By inviting technology suppliers to submit their suggestions, the Nordic Center hopes to guide the central bank to understand the applicability, applicability and readiness of various available solutions, risks and trade-offs, and the maturity of technology.

BIS Innovation Center invites suppliers to submit offline CBDC technology

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The Nordic department of the Innovation Center of the Bank for International Settlements (BIS) has issued an invitation to technology suppliers for the implementation of an offline function in the central bank digital currency (CBDC). Many central banks worldwide considering the use of CBDCs view offline function as a crucial requirement for several reasons, including flexibility, financial inclusion, crisis management, cash similarity, privacy, and accessibility. The bank has called upon technology suppliers to submit their proposals for offline functions in CBDCs to guide central banks in understanding the maturity and applicability of the available solutions, risks, and trade-offs.

The move highlights the growing demand of central banks to adopt digital currencies and the need for offline function. The Nordic department of the BIS is a vital center for monitoring and developing CBDCs, and its initiative to seek suggestions from technology suppliers demonstrates its keenness to explore innovative solutions for CBDCs. By inviting proposals, they aim to evaluate whether implementing an offline function is a viable option for CBDCs and to regulate appropriate standards for it.

The appeal for offline function is crucial because it enables digital transactions in areas with low or no network connectivity, especially during blackouts, natural disasters, or other unforeseen circumstances that may disrupt network coverage. This offline mode of CBDCs could work like physical notes, as it does not require network connectivity to transact, thus providing financial inclusion for people with limited network access. Moreover, it may have a significant impact on enhancing cash-like privacy and accessibility, making CBDCs acceptable to a large segment of the population.

The move by the Nordic department of the BIS positively impacts the global cryptocurrency economy, as it boosts technological innovation, operational efficiency, and encourages the development of digital solutions. However, it also poses some risks and challenges that need to be taken into account. The main risks would be related to security, as offline CBDCs may be vulnerable to fraud and hacking attacks. Additionally, the central banks face the challenge of incorporating offline technology while maintaining the integrity of the financial system.

In conclusion, the Nordic Center’s move to invite technology suppliers to submit ideas for implementing an offline function in CBDCs is a step towards revolutionizing the global monetary system. The initiative could help explore innovative options, foster financial inclusion and strengthen the resilience of the financial system. However, it should also be accompanied by stringent parameters for safety and security concerns.

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Nordic Center Seeks Offline Function for Central Bank Digital Currency

BIS Innovation Center invites suppliers to submit offline CBDC technology

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