A wholesale CBDC could successfully work with private stablecoins, shows research from the Hong Kong Monetary Authority and BIS Innovation Hub.
Then they investigated a retail e-wallet system in which the retail CBDC circulates among users – but with two types of tokens: an intermediated CBDC, or CBDC-tokens; and CBDC-backed stablecoins.
The researchers used UTXO (Unspent Transaction Output) to enable the traceability of the tokens to the backing assets, providing safety to end-users even if a commercial bank goes bust.
Listing the benefits of the set up, the paper says that the two-tier architecture provides additional privacy for the end-users as the interbank system does not record any personal data. Meanwhile, the decoupling of the wholesale and e-wallet systems strengthens the cyber resilience based on the principle of privilege separation and network segmentation.
The authors say “we have no doubt that the Aurum prototype will catalyse and inspire the global quest for the most suitable rCBDC architecture”.