Minutes
Date of meeting: 22 May 2024
Item 1: Welcome
Tom Mutton (Chair) welcomed Members to the twelfth meeting of the CBDC Technology Forum.
The Chair informed Members that the Bank of England (the Bank) published a report setting out the findings of their digital pound point-of-sale experiment on 16 May. The Chair noted that the experiment demonstrated that, from a technology perspective, existing point-of-sale terminals in the UK could be used to make digital pound payments. Such terminals might be one option for enabling digital pound payments at points of sale, but there were several other potential options for both point-of-sale and peer-to-peer (P2P) payments.
The Chair noted the agenda for the meeting would comprise a presentation from the Bank on guidelines for publishing material produced by subgroups, and presentations from two of the four subgroups that have been established on a time limited basis to help explore the technology considerations related to the digital pound architecture.
Item 2: Guidelines for publishing material
The Bank stated that the CBDC Technology Forum Terms of Reference allows subgroups to publish their own work, provided prior permission is sought from the Bank. Such publications should not mention association with the Bank or the CBDC Technology Forum as the subgroups’ work was produced by the members, and not by the Bank, and do not represent the Bank’s views. Given intellectual property considerations, it was for subgroup members to agree the use of their work, and to gain the necessary consents and assurances that IP rights have been respected. The Bank noted it would not arbitrate any disagreements between subgroup members.
Item 3: Subgroup 2 presentation
Members of Subgroup 2, tasked with exploring models of communication between PIPs, presented on their conclusions.
They explained that their analysis considered all potential participants in a digital pound ecosystem, including Payment Interface Providers (PIPs), External Service Interface Providers (ESIPs), the core ledger, and other parties. And they assessed communication models against a range of use cases, comparing ease of operation, technical performance, and privacy.
Members of Subgroup 2 stated that they defined three different models:
- Model one was a centralised model in which PIPs could interact with each other through the core digital pound system operated by the Bank.
- Model two was a centralised model where PIPs could interact with each other through a third-party operator.
- Model three was a decentralised model in which PIPs could interact with each other directly.
They then discussed some of the use cases they explored. Those included P2P payer-initiated payments, partially offline payments, transit payments, and fraud prevention and anti-money laundering.
Members of Subgroup 2 concluded that there were differences in ease of operation, but technical performance in terms of complexity of transaction was not significantly different among the three models. Subgroup 2 also concluded that models two and three were advantageous for privacy since those models could better achieve the privacy objective of keeping private data away from the central bank.
They suggested areas that the Bank could explore further, such as how different forms of communication might operate in parallel, and the implications of encrypting non-core personal data. They also suggested that the Bank could investigate the use of techniques, such as rotating keys, to support privacy.
Item 4: Subgroup 3 presentation
Members of Subgroup 3, tasked with exploring core ledger technology, presented their findings.
They stated that their objective was to identify a list of options and trade-offs, considering technical aspects such as throughput, speed and scalability. They reiterated that they considered the concepts of governance and architecture separately. Governance was the source of policy and the mechanisms by which it was enforced, whereas architecture was the definition of how and where system resources reside and interoperate.
They assessed both centralised and decentralised ledger technologies, and areas of contention were highlighted for experimentation. They proposed a range of areas that the Bank could consider exploring the comparison between centralised and decentralised ledgers in more detail.
- Scalability: They proposed a range of experiments to explore scalability, including configuration and deployment load tests, and using atomic read-write tests with off-shelf databases and DLTs.
- Finality: They proposed that the Bank could explore different DLT configurations or explore tolerance of soft finality in hybrid architecture, where high transaction throughput is exchanged for less reliable settlement.
- Availability: They proposed that the Bank could explore redundancy and outage tolerance mechanisms.
- Resilience and security: They proposed that the Bank could explore configuring a DLT system that runs rogue nodes, where the nodes have different consensus requirements and counts. They also proposed that the Bank could experiment with offline solutions to determine the overall costs and meantime to resolving double spending attacks.
Item 5: Closing remarks
The Chair closed the meeting and thanked Members for contributions.
Attendees
Bank of England
Tom Mutton (Chair)
Danny Russell
Members
Adrian Field, OneID
Alain Martin, Thales
Andrew Flatt, Archax
Ashley Lannquist, IMF
Bejoy Das Gupta, eCurrency
David MacKeith
Dominic Black, Ledgerz
Edwin Aoki, Paypal
Gary King, Lloyds
Georgios Samakovitis, University of Greenwich
Joshua Jeeson Daniel, JP Morgan
Julia Demidova, FIS
Keith Bear, Cambridge Centre for Alternative Finance
Kene Ezeji-Okoye, Millicent Labs
Lars Hupel, Giesecke+Devrient
Lauren Del Giudice, Idemia
Lee Braine, Barclays
Mark Shaw, Spotify
Michael Adams, Quali-Sign
Paul Carey, Stripe
Richard Brown, R3
Sarah Meiklejohn, IC3
Tim Moncrieff, Visa
Vikram Kimyani, Oracle
Will Drewry, Google
Apologies
Alan Ainsworth, Open Banking
Geoff Goodell, UCL
Inga Mullins, Fluency
James Whittle, Pay.UK
Paul Lucas, IBM
Simon Brayshaw, Motorway
Tom Beresford, Starling
Minutes of the CBDC Technology Forum slides – 22 May 2024