Central Bank Digital Currency: A Comparative Analysis in the Context of Design and Protocol Mechanisms

Year 2023, , 55 - 66, 31.01.2023

Emircan Yıldırım , Kerim Eser Afşar , Ramazan Bektaş

https://doi.org/10.17671/gazibtd.1132632

Cited By: 1

Abstract

The ecosystem of crypto money that started with Bitcoin and the attempts of big technology companies to establish their own payment systems began to threaten the monopoly rights of Central Banks on money. The ultimate response of the Central Bank towards these developments is the central bank digital currency (CBDC). In this study, a comparison of an alternative protocol used in blockchain networks with respect to efficiency, security, and privacy that is compatible with the CBDC literature will be provided. The intention of this study is to analyze the function of protocol and design features in the “new financial architecture”. In this context, we delve into the operation of the protocols mentioned in the CBDC design. Within the scope of this research, data were collected by using semi-structured interview technique with blockchain technology experts and subjected to comparative analysis. According to the findings obtained by the comparative analysis method, the use of the Proof of Authority (POA) protocol in the CBDC design can completely eliminate individual privacy by giving an opportunity to the central banks to oversee the entire financial system. In the absence of the offline payment (OPS) protocol, financial inclusion, one of the objectives of the CBDC, may become dysfunctional. Using variations of Proof of Work (PoW) and Proof of Stake (PoS) protocols might give rise to scaling problems. A hybrid protocol can be created by considering the strengths of the protocols used in CBDC designs. A strong protocol structure can significantly increase the functionality of the CBDC in the context of monetary policy. CBDC protocols are frequently discussed in the literature regarding their efficiency and security dimensions. We assume that the privacy dimension should also be included in the discussion.

Keywords

CBDC, consensus protocols, efficience, blockchain

Merkez Bankası Dijital Para Birimi: Tasarım ve Protokol Mekanizmaları Bağlamında Karşılaştırmalı Bir Analiz

Abstract

Bitcoin ile başlayan kripto para ekosistemi ve büyük teknoloji şirketlerinin kendi ödeme sistemlerini kurma girişimleri, merkez bankalarının para üzerindeki tekel haklarını tehdit etmeye başlamıştır. Merkez bankalarının bu gelişmelere olan nihai tepkisi merkez bankası dijital parasıdır (CBDC). Bu çalışmada blok zinciri ağlarında kullanılan alternatif protokol mekanizmalarının, verimlilik, güvenlik ve mahremiyet bağlamında karşılaştırması CBDC literatürünü kapsayacak şekilde yapılmıştır. Çalışmanın amacı protokol ve tasarım özelliklerinin “yeni finansal mimari” içindeki işlevini analiz etmektir. Bu bağlamda çalışmada, CBDC tasarımında bahsi geçen protokollerin işleyişini ayrıntılandırıyoruz. Araştırma kapsamında blok zinciri teknolojisi uzmanlarıyla yarı yapılandırılmış mülakat tekniği kullanılarak veriler toplanmış ve karşılaştırmalı analize tabi tutulmuştur. Karşılaştırmalı analiz yöntemiyle elde edilen bulgulara göre CBDC tasarımında Proof of Authority (POA) protokolünün kullanılması, merkez bankalarına finansal sistemin tümü bağlamında bir gözetim yapabilme şansı tanıyarak bireysel mahremiyeti tamamen ortadan kaldırabilir. Çevrim dışı ödeme (OPS) protokolünün kullanılmadığı durumlarda CBDC’nin amaçlarından biri olan finansal kapsayıcılık işlevsiz kalabilir. Proof of Work (PoW) ve Proof of Stake (PoS) protokollerinin varyasyonlarının kullanılması ise ölçekleme probleminin ortaya çıkmasına neden olabilir. CBDC tasarımlarında kullanılan protokollerin güçlü yönleri dikkate alınarak hibrit bir protokol oluşturulabilir. Protokol yapısının güçlü olması para politikası bağlamında CBDC’nin işlevselliğini arttırabilir. CBDC protokolleri literatürde çoğunlukla verimlilik ve güvenlik boyutlarıyla tartışılmaktadır. Tartışmaya mahremiyet boyutunun da dâhil edilmesi gerektiğini iddia ediyoruz.

Keywords

CBDC, konsensüs protokol, verimlilik, blok zinciri

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