The Central Bank of Canada proposed a detailed system to investigate the technical applicability of a retail -oriented central bank digital currency (CBDC) for digital Canadian dollar. The research was based on the OpenCBDC 2PC model developed with the Digital Currency Initiative of the Massachusetts Institute of Technology. This model aims to ensure that users have direct digital funds, just like digital cash, and to prioritize privacy and processing speed.
Confidentiality -oriented design
One of the important headings of the report was to evaluate the impact of digital currencies on privacy. While cash announcement, CBDCs can be used by states to follow financial activities, leading to global debates. In the light of these discussions, it is aimed to separate personal identity information from the process data in the proposed system. Thus, non -registered users can hold funds without sharing identity information in their own digital wallets; Registered users benefit from a similar level of privacy, as the Central Bank does not access their own identity or transaction history.
In addition, it is recommended to use cryptographic techniques such as zero information proof to increase the level of privacy. With this method, it is possible to hide the transaction amounts from the infrastructure. The research team points out that these features can offer higher privacy than existing electronic payment systems.
Bitcoin -like infrastructure
Another innovation of the model proposed in the research is Bitcoin rather than keeping user money in traditional bank accounts. 
$108,246.30‘Unpreased transaction outputs ”(UTXO) structure used in the structure was stored. The system performs transactions in two steps – updating a central book and transferring funds between user wallets. Such a design both ensures the completion of transactions in real time and prevents banks and public institutions from seeing the process details.
This structure may not compultify the involvement of intermediary institutions or banks in transactions, and users can give users more freedom of processing than traditional systems. In addition, since it is aimed at a decentralized structure, it is possible to protect financial data of individuals better than institutions and states.
Technical and Infrastructure Challenges
The proposed digital Canadian dollar architecture; Operational resistance is trying to balance user privacy and the control of the institutions. However, it is stated that significant technical improvements may be required for integration with the current retail payment infrastructure.
In particular, it is stated that technological updates may need to adapt to digital cash -like transfers of sales point systems in stores. In addition, although the system is theoretically scalable, performance decreases may be experienced during audits and system restore processes, and engineering studies are needed at this point.
Although a concrete technical foundation is presented with this study, it is clarified that there is no commitment to the fact that the Central Bank of Canada will soon initiate digital Canadian dollars. Nevertheless, it is emphasized that the model includes a balance in terms of user privacy, operational flexibility and corporate control.
“This research is not a direct implementation decision. The findings put forward offers a applicable technical infrastructure if needed”.
It is known that the new Prime Minister Mark Carney in Canada has supported CBDCs in the past. In his book, Carney, in his 2021 book, said, “The most likely future of money is the Digital currency of the Central Bank,”. However, this does not mean that the transition to practice will be definite; The decision can be shaped in connection with public and technical preparations.
Developed by the Central Bank of Canada, this model shows that alternative digital payment systems that prioritize user privacy are technically possible. The applicability of the system seems to be dependent on the compliance requirements of the existing infrastructure and the safety-description engineering studies. The model is considered to create a bridge between traditional cash and digital payment methods. The presence of the most balanced solution among public institutions, private sectors and users has become a priority in research.
Responsibility Rejection: The information contained in this article does not contain investment advice. Investors should be aware that crypto currencies carry high volatility and thus risk and carry out their operations in line with their own research.
