As pointed out by US President Joe Biden, the Office of Science and Technology Policy (OSTP) presented a report analyzing design choices for 18 central bank digital currency systems (CBDCs) for possible use in the United States.
The technical analysis of the 18 CBDC design choices was made across six broad categories — participants, governance, security, transactions, data, and adjustments.
As instructed by the President of UnThe, the technical analysis of the 18 CBDC design decisions was conducted across six broad categories – Participants, Governance, Security, Transactions, Data, and Customizations. The OSTP sees technical complexities and practical limitations in attempting to build a permissionless system administered by a central bank, adding: In the United States, Joe Biden, the Office of Science and Technology Policy (OSTP) presented a report which analyzed the design decisions for 18 central banks digital currency (CBDC) systems for possible implementation in the United States.
“It is possible that the technology underpinning a permissionless approach will improve significantly over time, which might make it more suitable to be used in a CBDC system.”
Though, the analysis expected there is a central authority and a permission CBDC system.
Helping policymakers decide on the ideal US CBDC system, the OSTP report emphasized the implications of including third parties in the two design choices under the ‘participants’ category — transport layer and interoperability. For governance, the report considered various factors related to permissions, access tiering, identity privacy, and redress.
Other important factors OSTP wants policymakers to ponder include cryptography and secure hardware (for security), signatures, transaction privacy, offline transactions and transaction programmability (for transactions), data model and ledger history (for data) and fungibility, holding limits and adjustments on transactions and balances (for transactions).
The technical assessment for a US CBDC system emphasized the report’s inclination toward an off-ledger, hardware-protected system. Upon the launch of a US CBDC, the report will ultimately highlight the various trade-offs policymakers decided to make when finalizing the design choices.
On September 8, the OSTP recommended oversight and regulation, balancing the environmental and energy impacts of crypto assets in the United States. The related OSTP report highlighted that crypto assets use approximately 50 billion kilowatt-hours of energy per year in the U.S., which is 38% of the global total, despite the fact adding:
“Noting direct comparisons are complicated, Visa, MasterCard, and American Express combined […] consumed less than 1% of the electricity that Bitcoin and Ethereum used that same year, despite processing many times the number of on-chain transactions and supporting their broader corporate operations.”
The report further highlighted the high power consumption of proof of work (PoW) when staking crypto assets.
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