CBDC Interoperability Under Finternet Framework
One World, One Network, Infinite Possibilities
Motitvation
What drives us?
Ongoing CBDC Development
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There is a high demand from central banks, researchers, computer scientists, policy- and decision-makers to explore further
Blockchain
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Applications
Finternet
- On Apr 2024, BIS proposed Finternet, a vision of interconnected financial systems enabling rapid and cost-effective transactions.
- Ultimate goal of the combination of finance and technology
Current Limitation
Cross-Border Interoperability:
- Critical issue for CBDCs.
- Many systems lack compatibility.
Impact:
- Hinders the full potential of the FinTernet.
- Limits benefits of a globalized digital financial system.
Analysis Gap:
- Lack of analysis on CBDC interoperability within the FinTernet context.
Objective
Our Goals, Our Commitment
Bridge Knowledge Gap
- Connect conceptual discussions with technical implementation of CBDC interoperability in the Finternet ecosystem.
Identify and Demonstrate
- Identify the most promising approach for practical implementation.
- Demonstrate feasibility through a proof-of-concept demo.
Contribute Insights
- Support development of the FinTernet ecosystem.
- Pave the way for future cross-border financial transactions.
- Accelerate adoption of efficient, interconnected financial systems.
Deliverable
Theoretical and Practical
Comprehensive Analysis
Analysis of CBDC Interoperability Models:
- Detailed examination within the FinTernet framework.
Methodology:
- Use a multivocal literature review approach.
- Incorporate a wide range of perspectives.
- Examine relevant global case studies.
Focus Areas:
- Five interoperability models with the 8 features of Finternet from the Bank for International Settlements (BIS).
Interoperability Model
- Compatible
- Interlinking
- Single System
- Single Access Point
- Bilateral Link
8 Design Principles of Finternet
- Users at the centre
- Interoperability
- Evolvability
- Modularity
- Scalability
- Division of labour and competition
- Inclusiveness and accessibility
- Security and privacy
Goal
- Identify the most desirable model for practical implementation
Demo
Proof-of-Concept Demonstration:
- Implement the most promising CBDC interoperability model.
- Practical demonstration within the FinTernet ecosystem.
Key Features:
- Cross-border Transactions: Seamless international transfers and settlements.
- Currency Conversion: Efficient and secure exchanges between digital currencies.
- Integration with Existing Financial Infrastructures: Compatibility and interoperability with current systems.
Demo Blockchain Construction:
- Simulated environment to test functionality, scalability, and security.
- Comprehensive view of potential real-world application.
Organizational Structure
Supervisor: Professor Chow, Kam Pui