Thread by @HenriArslanian

1/The BIS and the Bank of England shared the results of a very impressive retail #CBDC pilot called Project Rosalind. 

#Bitcoin maximalists will have a heart attack but central banks will rejoice. 

Too busy to read the 35+ pages of the report? Here are the key takeaways:

🧵👇

2/ The project is named after British scientist Rosalind Franklin, whose work was key on DNA sequencing.

The goal was to explore practical features of a retail CBDC and how APIs could enable to interact with private sector providers to safely provide retail payments.

3/ There are various type of retail CBDC and the BIS chose a two-tier CBDC model. 

As I explain in my last book, there are also various types of two-tier retail CBDC models.

To simplify, it comes to whether the central bank has identifiable record of all transactions or not.

4/ There are also two types of retail CBDCs: account based (~ like a bank account) and token based (~like fiat cash). 

Both types were tested in Rosalind with over 30 use cases tested. 

The project showed that that a retail CBDC works for both account based or token based.

5/ From a technical perspective, 33 APIs in 6 categories were tested and over half million API calls were made. 

The account based model was built on Ethereum based Hyperledger BESU and the token based on Hyperledger Fabric.

6/There  are a number of key takeaways from Project Rosalind.

7/ Privacy from the central bank was possible. All TXs were made with personal identifiable information and transaction data residing only with the various providers.

But crypto maximalists will say that if a central bank wants that data, it can simply subpoena the providers.

8/ The project also showed that the desired level of security can be achieved from non-repudiation to anti-replay (that ensures that you cannot do the same transaction multiple times to trick the system). 

This is essential in any payments system with any goals of scaling.

9/ The project also showed that we can use common industry standards (eg ISO 20022 messaging standard) that would allow service providers to use the ecosystem. 

This is essential as ISO 20022 alone took over 20 years to get all the major players to agree.

10/ Project Rosalind was also a success as it tested a very broad range of use cases - from retail and business to even programmable money. 

This showed that many of the key features of digital assets were able to be implemented successfully in a retail CBDC.

11/ What was also unique with this project was that many major tradfi players were involved, from MasterCard and Amazon to the Bank of Canada and Barclays. 

This was not a small test by nerdy academics in a lab.

12/ As I have mentioned many times, we will all see CBDCs become mainstream during our lifetime.

Project Rosalind showed once again that from a technical perspective, we are there (as China has already shown).

13/ The big debate now will be on policy matters, especially when it comes to privacy in payments.

Rosalind showed that we can address these.

14/ There is no doubt that retail CBDC will become an important political and policy topic of debate in the next decade, particularly in the US and Europe, and as other countries who do not need to directly address privacy concerns move forward and implement retail CBDCs.

15/ The final report of Project Rosalind is available here: 

bis.org/publ/othp69.pdf

16/ Found this content useful? Make sure to follow me on Twitter (@HenriArslanian) but also on YouTube (@HenriArslanian) where I post a lot of exclusive content.

youtube.com/@HenriArslanian