Designing with Digital Tokens: A Primer for Central Bankers

Many central and commercial banks are now exploring the use of blockchain or more generally, distributed ledger technology (DLT) for the design of new payment systems infrastructure around the world. Native crypto-assets as well as tokens issued on DLT networks, such as Central Bank issued Digital Currency (CBDC) and so-called stablecoins, are being considered as building blocks.

Dilip Rao offers a framework for the assessment of needs for different use cases against the attributes of various DLT tokens for a more rigorous selection of technology.

In summary:
– Digital token attributes are critical to solving for your use case of interest
– CBDC, bank tokens and crypto-assets solve different problems and can work together
– A thoughtful design approach can result in better outcomes at lower costs and risks

Read more: Central Bankers Payments News Oct 2019, pp 18. Courtesy Currency Research.