Research from the Hong Kong Monetary Authority and the BIS Innovation Hub indicates that a wholesale central bank digital currency (CBDC) could effectively interface with private stablecoins.
Project Aurum, named after the Latin word for gold, involved the development of a technology stack that features a wholesale interbank system, where the wholesale CBDC is issued to banks for distribution to retail users. The project also explored a retail e-wallet system where the retail CBDC circulates among users using two types of tokens: intermediated CBDC tokens and CBDC-backed stablecoins.
The researchers employed Unspent Transaction Output (UTXO) technology to ensure that tokens could be traced back to their underlying assets, enhancing safety for end-users even in the event of a commercial bank failure.
The advantages of this setup include a two-tier architecture that offers enhanced privacy for users, as the interbank system does not store personal data. Furthermore, separating the wholesale and e-wallet systems increases cyber resilience through privilege separation and network segmentation.
The authors of the study assert, "we have no doubt that the Aurum prototype will catalyze and inspire the global quest for the most suitable rCBDC architecture."
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