Federal Reserve: Prerequisites for universal central bank digital currency (CBDC) -Part 11

Si Gyeongmin

Nov 10, 2021

Obvious supply. Turning to the "supply" aspect of market preparation, the ecosystem structure, hardware infrastructure, and market participants must be prepared to accept CBDC. The CBDC ecosystem includes many functions, such as publishing, distribution, storage, use, customer service, reporting, monitoring, and maintenance. In order to meet market expectations, it is necessary to establish a new payment track, or upgrade or change the traditional payment track. It is not an easy task to establish a new payment technology or even modify an existing technology. According to the design arrangement, the necessary investment may discourage some companies. Even today, the ability to make contactless payments using credit cards or QR codes is not universal in the United States.

In order to ensure an obvious supply, activities and communication between all parties must be coordinated. Coordination activities include establishing standards and upgrading the capabilities and processes of various elements of the system to incorporate new technical features, functions, and enhance safety. Both individuals and businesses need operational guidance to understand how the system will work and what they need to do to use it. Communication between market participants is equally important. Individuals, companies, banks, payment service operators, central banks, etc. all need to have a clear understanding of the rights and responsibilities of all parties involved. Currency is a social and legal contract, which must be fully understood and agreed upon by users.

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