0
0
On October 21st, the Hong Kong Monetary Authority unveiled the final version of the Aurum retail central bank digital currency (CBDC). The systemās unique architecture reflects the complexities of the current system for issuing money in Hong Kong. Moreover, it was created in collaboration with the Bank of International Settlementsā (BIS) Innovation Hub.
To put it simply, Aurum is a wholesale interbank system and a retail electronic wallet all rolled into one. The electronic wallet is set up at a neighborhood bank and is accessible through a smartphone. However, with a validator system in place, banks canāt issue too many tokens, and users canāt redeem them twice.
Electronic wallets employ CBDC that has passed via an intermediary exchange, while banks use stablecoins backed by CBDC. The novel CBDC-backed stablecoins mimic digitally the preexisting monetary system in Hong Kong, where banknotes are produced by three financial institutions and guaranteed by the central bank. Furthermore, stablecoins are liabilities of the issuing bank with supporting assets held by the central bank, while the CBDC is a direct obligation of the central bank.
The authors stated:
āBringing CBDC-backed stablecoins to life has never been done before and we therefore felt that doing so may supplement the growing body of research on private sector stablecoins. Indeed, what distinguishes Aurum from private sector stablecoins is that Aurumās stablecoin balances are reconciled, versus real time gross settlement (RTGS) balances of the issuing bank with the central bank.ā
Furthermore, when making a purchase at a store, customers often use a pseudonym. Usersā identities are hidden from view except by the Know Your Customer mediator. Moreover, as a precaution against commercial bank insolvency, unutilized digital money is tracked anonymously over a series of transactions using records of transaction outputs.
Recommended For You:
0
0
Manage all your crypto, NFT and DeFi from one placeSecurely connect the portfolio youāre using to start.
