A Process design flowchart for centralized cryptocurrency backed by Government
How the central bank digital currency (CBDC) process toolkit aim at representing a country's official currency in digital form
A CBDC evaluation and design process is depicted in the flowchart above. Each country's approach to assessing CBDC will be distinct, and it should be guided by its own needs and interests.
Phase 1: Preliminary analysis
1. Project management and background assessment - Legal and institutional examination - Project initiation, administration, and decision-making
2. Identify the issues - List the significant geographic, political, economic, and technological factors that could influence the utility or desirability of CBDC in your country.
Phase 2: Initial Evaluation
3. Decide Forms of CBDC:
– Retail CBDC
– Domestic
– Cross‑border
– Wholesale CBDC
– Domestic
– Cross‑border
– “Hybrid CBDC”
4. Evaluate Digital payments ecosystem and landscape
Phase 3: Evaluate Risks
5. Operational risks and financial inclusion in retail CBDC
6.Data protections and compliance for retail CBDC
7. Evaluation of macroeconomic and financial risks and opportunities
Phase 4: Designing
8. CBDC design elements
– Availability/access
– Custody and storage
– Anonymity
– Account and transaction limits
– Interest payments
– Conversions and redemption rates
– Settlement times and finality
– Programmability features
– Lending activity –
9. Technology choices, considerations and risks
– Core functionalities
– Technology assessment
– Cost assessment
– Cybersecurity and resilience
– Interoperability and integration
10. Governance
– Legal evaluation
– Financial management
– User engagement
– CBDC termination
– Identification of performance criteria
Phase 5: Preparing to deploy
11. Implementation strategy
– Experiments and prototyping
– Methodology
– Public engagement for retail CBDC
– Collaborative experimentation and deployment
12. Introduction plan
Lastly, the central bank should develop a CBDC introduction plan that considers vital factors such as
– The scope, nature and specific deployment strategy
– The timeline
– A strategy to introduce and monitor the CBDC roll‑out
– Policies the central bank will put into place to ensure a controlled roll‑out of CBDC
For instance, CBDC evaluation may take a more dynamic or cyclical form, where issues are continually re‑evaluated. Below is an overarching process framework for CBDC:
To learn more about how to leverage evolving process frameworks in your digital strategy, contact team@crelytics.io or visit resources at Crelytics, your no-code process transformation platform.