Blockchain, Central Bank Digital Currency

BIS invites applications for next phase of UK CBDC API project

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The Bank for International Settlements (BIS) is calling for applications from payment providers who want to participate in the next phase of its central bank digital currency (CBDC) API project, dubbed “Project Rosalind,” a joint initiative with the Bank of England (BoE).

Through its London-based Innovation Hub, the BIS invited expressions of interest from payment service providers, academia, and the general public to develop retail use cases for the CBDC.

Interested parties have until February 10 to apply, with the selected teams set to be notified two weeks later.

The first phase of Project Rosalind is set to draw to a close in Q1 this year. It involved developing an API prototype for a retail CBDC. With the API, BIS was targeting making the CBDC available to banks and other payment interface providers (PIPs), who would then provide it to retail consumers.

With the completion of the first phase, the BIS and BoE will now commence the second phase, exploring the use cases of retail digital currency. Successful applicants will be tasked with developing innovative applications that leverage the CBDC, targeted at retail users.

These applications will have to allow users to create CBDC accounts and access their balances easily. A Rosalind TechSprint will follow, where the participants will be required to demonstrate the feasibility of their applications.

BIS requires all applications to be innovative and either develop entirely new payment concepts or improve existing payment options. They can solve existing challenges or anticipated future problems or unlock new capabilities that leverage emerging or future technology.

With Project Rosalind, the BIS is exploring interoperability, privacy, whether to apply an account-based or token-based model, and more. The project isn’t delving into cybersecurity, throughput, performance, resilience, regulatory issues, or efficiency.

BIS has clarified in the past that in its ecosystem, central banks will only oversee issuing the tokens and processing each transaction individually for every consumer. Every other facet, including AML and CFT policies, would be under the payment service providers.

The BIS model is in line with the European Central Bank, with the regional central bank recently saying that it would not concern itself with issues such as privacy and data protection with the digital euro, leaving these to central banks.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

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