For any commercial entity, saving time and money is always an incentive to innovate. The trust-less and immutable qualities of decentralized blockchains, create the possibility to reduce costs and speed in transaction processes. That way it makes (cross boarder) transactions between different legal entities faster, safer and cheaper. "With CBDC (Central Bank Digital Currencies) implementation, banks will be capable of delivering value right to the customer, avoiding unnecessary third-party iterations. For banks, it means saving a huge amount of money, and for customers, it means faster and less expensive money transfer."
Tezos is working on two CBDC application proposals for both the Banque de France and the National Bank of Ukraine. Before anyone cries MOON: these are proposals. Anyone can submit a proposal. Nothing is official. But Tezos is working itself into the CBDC (Central Bank Digital Currency) game for a while now and is a serious party on this subject. Just over a month ago, Ryan Lackey of the Tezos Foundation was one of the speakers at the international CBDC conference which was held February the 21th of this year. (Take a moment to note that Tezos is the only blockchain project that was represented on that conference.) It struck Ryan Lackey that the attendees where very enthusiastic and motivated to explore CBDC solutions.
"Big open question is just how to get the right solution out there. Privacy is one issue that various central banks [that plan on] deploying this stuff, have on their radar. Generally I’d say European banks are very demanding of privacy, especially when value thresholds can be set, but each bank and regulator will be different."
Privacy features in Tezos will be implemented this year, so Tezos will be able to deliver on that subject. Lackey spoke about a hybrid private/public model of privacy features on Tezos at the CBDC conference.
"We're flexible, and it's ultimately up to the central banks how they want it deployed, but what I've found is they want a menu to choose from."
There are organizations within the Tezos ecosystem that have been working on blockchain based CBDC-like applications for some time now. Attic Labs (Tezos Ukraine = Attic Labs), has been working on similar projects since at least 2015. First Stellar-based, but that didn't work out for them. Now they work on an application build on Tezos. At this moment, there is a french team working on the same subject.
The Banque de France
"The aim is to explore the potentialities offered by this technology, and to identify concrete cases integrating Central Bank Digital Currencies in innovative procedures for the clearing and settlement of tokenised financial assets."
The Bank of France is known to have an interest in Tezos developments since the beginning of Tezos launch. They have even been running a Tezos node. And developments on Tezos' Tenderbake is also being followed by the Bank of France. So Tezos has been on the radar for a while and a submission for a CBDC application will be taken seriously. How do we know Tezos is working on a CBDC application? When asked whether or not the Tezos foundation or any associated organization has submitted an application, the answer came from Ryan Lackey, Tezos Foundation: "There is a team of people in France from the Tezos ecosystem working on this."
National Bank of Ukraine
The NBU (National Bank of Ukraine) is creating a working group in order to build the production-level product for digital cash. Attic Labs has been working with banks in the Ukraine for years now, and "has gained deep expertise in cyber-security and blockchain space. It can be considered as one of the most specialized tech-companies that can build the infrastructure for Ukraine."
For a CBDC application to pitch for the National Bank of Ukraine, Attic Labs was looking for serious partners with a strong focus of finance and found that the Tezos ecosystem shares similar ideas and spirit.
"This infrastructure can be easily built on the basis of the Tezos technology, which was created in the first place with an idea to have formal verification of smart-contracts which essentially has the same objectives and principles as banking transactions and databases. The National Ukrainian CBDC will have the atomic swap functionality which is embedded into the Tezos technology and allows to make transfers instantly across different currencies and assets. Moreover, Tezos technology as itself will be tailored to banks’ private ledger needs and other requests that have very narrow specifics. Integration and adaptation of CBDC will cost almost nothing compared to traditional changes in banking infrastructures because Tezos technology has solid community support across many continents."
For the full introduction on Tezos, read this article.
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