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From YouTube: Towards a Scalable, Privacy-Preserving, and Regulatable CBDC Framework - Mark Rakhmilevich, Oracle
Description
Towards a Scalable, Privacy-Preserving, and Regulatable CBDC Framework - Mark Rakhmilevich, Oracle
Central Bank Digital Currency (CBDC) has gained momentum across the world. We’ll review some of the important work being done across banks in Asia, Africa, Europe, and the US and discuss the most critical questions being raised about public/private roles, scalability, privacy and regulatability. This session will discuss potential answers and models being proposed to create a balanced system that maximizes monetary stability, convenience, and scalability, while balancing privacy with the requirements for regulation and accountability.
Sessions Details & Slides (if available): https://sched.co/14H6A
Access All Sessions: https://events.linuxfoundation.org/hyperledger-global-forum/program/schedule/
----
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License
Creative Commons Attribution license (reuse allowed)
A
My
name
is
Margaret
milovic
I'm
with
Oracle.
We
have
been
a
member
of
hyperledger
since
I
think
2017
when
we
joined
and
he
have
participated
actively,
particularly
in
hyperledger
fabric.
We
have
built
and
brought
out
the
markets
and
products
based
on
hyperledger
fabric
technology,
Oracle,
blockchain
platforms,
specifically
so
I've
been
in
the
market
for
about
four
years
since
2018,
when
we
first
launched
the
cloud
version
and
subsequently
an
on-premises
version
as
well
and
recently
over
the
last
year,
maybe
and
a
half,
we
have
started
seeing
opportunities
in
Central
Bank
digital
currency
space.
A
As
you
know,
oracle
has
a
number
of
central
banks,
as
our
customers,
of
course,
commercial
Banks
as
well,
and
some
of
those
conversations
have
started
reaching
into
the
cbdc
space.
So
we
have
become
more
active
in
the
space
and
I'm
going
to
share
with
you
a
little
bit
of
what
we
see
as
a
landscape
and
perspective
in
that
space.
Our
sandbox
solutions
that
we
have
put
together
as
a
project
we
use
and
really
focus
and
do
a
little
bit
of
a
deep
dive
onto
some
of
the
specific
challenges
that
you
know.
A
Common
area
of
scalability,
particularly
we're
talking
about
retail
cbdc,
you
know
running
a
digital
currency
system
for
a
few
hundred
to
maybe
a
few
thousand
financial
institutions
is
not
that
hard
from
scalability
perspective.
When
you
talk
about
running
it
for
a
country
with
you
know,
100
million
people-
or
you
know,
places
like
India,
which
is
over
a
billion
people
that
becomes
a
different
category
of
a
problem
and
we'll
also
deep
dive
on
the
topic
of
privacy
and
confidentiality
and
how
to
balance
those
expectations.
A
Okay,
let's
see
if
it's
a
there,
we
go
all
right.
So
there
has
been
obviously
a
lot
of
exploration
in
this
space
right
over
90
countries
who
have
been
exploring
cbdc
was
its
writing
white
papers,
doing
research,
running
pilots
and
so
on,
but
there's
actually
10
countries
that
have
launched
digital
currency.
A
There
is
obviously
you
know,
we
know
about
the
work
done
in
China,
Eastern
Caribbean,
there's
been
a
few
and
the
session
this
morning
that
was
supposed
to
include
a
person
from
Nigeria
as
well,
because
they
have
launched
recently
I
think
it
was
last
year
just
last
year
in
the
fall
High
political
fabric
based
digital
currency
environment.
So
you
know,
there's
a
lot
of
drivers:
I'm
not
going
to
go
into
all
of
the
business
discussions
about
why
cbdc
is
becoming
an
important
topic
for
many
central
banks.
A
Just
briefly
to
summarize,
there
are
concerns
about
impact
of
cryptocurrency
on
the
sovereignty
of
money
and
currency
Management
in
various
countries.
Right
there
is
obviously
you
know,
presence
with
Bitcoin,
with
ethereum
there's
many
other
cryptocurrency
environments
and
in
some
countries
they're
beginning
to
have
a
significant
impact
and
impact
the
national
economy.
So
central
banks
are
concerned
about
you,
know
monetary
policies
that
they
must
control
and
must
remain
in
their
hand.
Sovereignty
is
a
big
issue.
A
Stability
of
the
monetary
system
is
also
important,
particularly
you
know
during
the
in
the
covet
pandemic
times
when
many
banks
struggled
when
you
think
how
we
handle
electronic
payments
today,
whether
it's
in
a
debit
cards
credit
cards,
you
know,
funds
transfer.
A
lot
of
that
depends
on
not
central
bank
money,
but
commercial
money,
money,
that's
created
by
the
commercial
advantages,
commercial
banks,
financial
institutions
right
through
the
loan.
A
You
know
deposits
come
in
gains
the
loans
going
out
and
if
that
part
of
the
bank
is
going
to
software
and
the
bank
is
not
going
to
be
able
to
maintain
its,
you
know
role
in
that
space
and
they're,
going
to
have
issues
with
loans
not
being
paid
and
so
on.
That's
going
to
bleed
an
impact
into
the
ability
to
handle
payments
as
well,
and
so
some
central
banks
are
thinking
about
how
to
separate
the
payment
making
capability
which
is
critical
to
functioning
of
the
economy
from
the.
A
Moreover,
you
know
money
creation,
capability
and
lending
capability
investment
capability
of
the
banks
and
not
necessarily
ties
the
two
together.
So
cbdc
offers
some
of
those
new
capabilities.
Another
area
is
financial.
Innovation
ability
to
you
know
create
in
an
economy,
particularly
in
many.
You
know,
developing
countries,
you
know,
capabilities
that
would
attract
investment,
would
attract.
You
know
e-commerce
and
fintech
industry
and
all
of
those
things,
and
that
depends
in
part
on
having
those
kind
of
you
know:
digital
currency
capabilities,
but
again
within
the
control
and
the
oversight
of
a
central
bank.
A
Now,
when
we
talk
about
Central
banked
digital
currency
right,
we
have
to
make
a
few
definitions
here.
There
is
what's
called
money
flower,
which
is
a
work
that
was
done
a
few
years
ago
to
describe
the
different
types
of
money
and
then
highlight
you
know
the
intersection
of
token
and
Central
Bank
issued
versus
digital
or
widely
accessible
categories
and
place
Central
Bank
digital
currency
within
this
money
flow
right.
So
you
typically
have
you
know
tokens
that
can
be
issued
by
Central.
Bank
right
in
the
value-based
economy
also
could
be
account
based
right.
A
There
is
was
talking
an
account
based
money
systems
out
there
and
the
main
things
they
have
all
to
be
issued
by
the
central
bank.
They
all
have
to
be
digital
right.
So
there's
this
within
the
green
and
blue
ovals,
but
they
could
be
talking
no
account
base
and
there
could
be
widely
accessible
in
the
retail
case
or
just
interbankments
are
not
widely
accessible,
they're
just
for
financial
institutions
to
transact
with
one
another.
So
it's
kind
of
some
basic
definitions
of
what
constitutes
cbdc
when
you
start
dealing
with
the
banks
and
talking
to
them.
A
So
there's
a
lot
of
issues
that
they
have
to
address,
though
it's
not
just
the
question
of
how
do
I
Implement
one
of
the
things
there
are
policy
controls
right.
How
do
you
control
the
amount
of
money?
Is
it
a
price
control
which
we
know
as
interest
rates,
or
is
it
quantitative
control,
where
you
specify
certain
accounts
can
have
only
up
to
certain
limits
of
cbdc?
A
You
know
what
role
should
the
Central
Bank
play
versus
commercial
entities
before
earlier
on
the
panel
today
that
this
is
a
big
topic
for
Bank
of
France
and
the
Euro
system
in
general
because
they
want
those
Banks
to
participate?
Obviously
you
know
we're
talking
about.
You
know
the
numbers
of
people
in
the
retail
cbdc
environment
in
Europe,
for
example,
that
the
Central
Bank
ECB
is
not
going
to
be
able
to
handle
and
provide
those
Direct
Services.
A
So
it's
going
to
be
an
indirect
system
to
tier
system
and
those
commercial
Banks,
probably
want
to
participate
or
central
banks
can
create
new
regulated
entities,
typically
referred
to
as
payment
service
provider.
There's
a
payment
interface
providers
which
could
operate
on
the
different
Charters
and
not
be
allowed
to
engage
in
any
lending
or
other
kind
of
risky
activities,
but
strictly
be
there
just
for
the
payment.
So
there's
a
lot
of
policy
issues
right,
but
then
there
is
also
technology
questions.
A
Do
you
implement
it
using
a
GLT
or
blockchain
platform,
or
do
you
use
more
traditional,
centralized
Ledges
built
on
a
database?
How
do
you
ensure
resilience
and
safety?
Do
you
use
an
account?
A
token
based
money
system
or
try
to
bring
the
two
together
to
maximize
the
benefits,
privacy
and
anonymity
is
very
important.
Obviously,
for
acceptance,
I
mean
if
you
create
a
system
where
in
a
central
bank,
can
actually
see
every
single
transaction
between
between
Alice
and
Bob.
A
Alice
and
Bob
are
going
to
go
elsewhere,
they're
not
going
to
want
to
use
it,
but
at
the
same
time
the
bankers
will
be
able
to
regulate
right.
I
mean
we'll
know
about.
You,
know:
money
laundering,
regulation,
sanctions
controls,
you
know
all
the
rest
of
it,
and
so
certain
transactions
you
have
to
be
overseas.
You
have
to
be
able
to
understand
Who's
involved
in
those
transactions
and
zones.
That's
a
balancing.
Scalability
is
obviously
very
important,
particularly
when
we
want
to
ensure
that
there
is
immediate
finality
in
a
payment
right.
A
If
Alice
makes
a
payment
to
Bob,
you
want
Bob
to
be
able
to
use
those
funds
to
make
his
own
payments
so
that
immediate
finality
is
something
that
requires
very
low
latency.
But
in
order
to
ensure
scalability,
you
want
to
parallelize
the
environment.
You
want
to
charge
the
Ledger
if
you
will
and
then
cross
shot
transactions
begin
to
cause
to
have
challenges
with
regard
to
latency
and
so
on.
There
is
also
coexistence
with
other
payment
mechanisms
and
rails
monitoring
and
those
other
things
right.
A
So
all
of
those
are
very
specific
topics
of
discussions
that
we're
having
with
the
number
of
banks.
Now
hyperledger
Community
has
been
very
active
in
cbdc
space.
There
are
other
dlts
and
other
blockchain
Technologies
out
there.
You
know.
Even
our
court
has
been
participating
in
quite
a
few.
There
has
been
in
a
quorum
and
a
couple
other
implementation
as
well.
But
if
you
look
at
the
map
here,
hyperledger
fabric
euroha
bezo
have
been
very
active
in
this
deployment
map.
A
If
you
will
of
cbdc
is
out
there
and
you
know
the
things
that
will
continue,
because
hyperledger
brings
together
some
of
the
most
Advanced
Technologies
needed
for
Bank
grade
implementations
and
so
I'm
going
to
talk
to
you
a
little
bit
about
how
we're
approaching
it
and
this
the
work
we've
been
doing,
particularly
around
hyperledger
fabric.
What
it
looks
like
so
just
a
few
examples
of
some
engagements.
We
are
participating
with
both
Bank
of
England
and
European
Central
Bank
in
various
technology
discussions.
A
There's
a
standing
technology
Forum
that
bank
of
England
established
since
he
published
a
white
paper
and
we've
been
participating
in
those
conversations
as
well
as
with
zcb,
and
they
have
raised
a
set
of
topics.
They
invited
vendors
to
respond
to
them
and
Oracle
partnered
with
a
company
called
sw7
to
respond
specifically
on
two
topics:
one
about
privacy,
preserving
Technologies
and
Retail
payments
and
another
one
was
about
how
to
fund
and
defund
digital
wallets
in
a
manner
that
does
not
link
the
Fiat
account
from
which
you're
funding
it
bank
account
with
the
anonymized
cbdc
account.
A
So
we've
had
those
discussions.
We've
also
been
involved
with
RBI
in
India.
Some
initial
discussions
focusing
on
their
goal
of
deploying
an
interbank
cbdc
later
this
year,
or
maybe
in
2023
at
the
latest.
We
actually
created
a
prototype
implementation
based
on
Oracle
blockchain
platform
and
some
of
our
other
Technologies,
and
also
been
working
to
extend
it
kind
of
in
a
2T
architecture
bringing
in
the
capabilities.
We
have
an
Oracle
database
as
well
for
more
scalable
retail
portion
of
that
we've
also
been
working
with
Central
Bank
of
Philippines
bsp
on
their
intercompany.
A
They
started
with
a
wholesale
approach,
initially
through
a
number
of
presentations,
demos
and
so
on
and
beginning
now
phase
one
POC,
where
they're
bringing
in
10
to
15
financial
institutions
to
be
able
to
participate
in
this
rollout.
Initially,
it's
going
to
be
essentially
issuing
transferring
cbdc
currency
on
the
24
7
basis
because
they
have
today
a
system
internally
that
has
basically
you
know,
Limited
hours
right
in
the
rtgs
implementation
and
their
concern
is
that
what
happens
out
of
those
hours
when
the
banks
cannot
settle
right?
A
There
is
potential
risk,
so
they
wanted
24
7
equivalent.
Basically
of
that,
the
second
phase
will
actually
integrate
with
the
system
and
allow
the
financial
institutions
to
transfer
between
fiat
currency
and
Central
Bank
digital
currency
as
well.
Basically,
you
know
digital
peso
in
Philippines,
so
involved
in
that
one
we've
also
been
working
with
Central
Bank
of
Kenya
through
a
number
of
proposals
and
discussions.
Kenya
is
quite
interesting.
A
If
you
know
a
little
bit
about
the
payment
systems,
they
have
something
called
impassive,
which
is
a
mobile
payment
system
which
covers
around
50
of
payments
in
the
economy.
It's
very
popular,
it's
very
scalable.
It's
been
built
initially
by
their
Telecom
providers
and
widely
used
in
the
country.
It's
also
used
in
cross-border
payments.
You
know
between
people
in
Kenya
and
in
other
countries
as
well
in
East
Africa.
A
A
18
months
or
so,
when
we
talked
to
many
banks,
they
are
trying
to
put
together
a
roadmap
of
water,
cbdc
rollout
could
look
like
like,
and
so
we
propose
basically
a
roadmap
that
starts
force
with
inter-bank
payments
in
the
bank.
Payments
Wholesale
cbdc
in
some
sense
is
simpler
to
sub.
It
brings
up
a
subset
of
issues
subset
of
requirements
compared
to
a
retail
one.
So
that's
an
easier,
simple
place
to
start
improves
the
capabilities
where
you
have
only
participating,
Banks
or
the
financial
institutions,
and
initially
it
became
become
sort
of
you
know.
A
A
payment
versus
payment
implementation
followed
by
delivery
versus
payment,
will
fix.
You
know:
income
security
settlement
between
the
banks
is
done
through
the
central
bank
as
well
through
the
central
digital
currency.
You
can
then
extend
it
to
allow
large
companies
right,
Enterprise,
B2B
kind
of
payments
to
start.
A
You
know
working
through
that
system
as
well,
and
then
you
can
also
introduce
that
cross-border
if
the
central
bank
is
able
to
and
willing
to
collaborate
with
other
Banks
as
well,
where
they
have
a
lot
of
trade,
and
then
you
extend
that
into
a
retail
world
and
some
of
those
interesting
discussions
are
here
in
the
retail
world.
Again
there
is
multiple
phases
involved.
A
One
of
the
interesting
things
in
discussions
we
had
in
Indian
particular
is
that
there
is
a
lot
of
government
payments
government
to
people,
whether
it's
from
central
government
or
through
the
state
government.
So
it's
government
to
government
to
people
and
the
traceability
is
that
cbdc
could
enable
in
that
area
is
quite
interesting,
so
they've
been
thinking
about
that
as
a
separate
phase
from
ultimately
bringing
in
you
know,
P2P
person
to
person
retail
payments,
which
would
be
you
know
the
sort
of
the
last
level
of
scalability.
A
So
when
you
start
looking
at
this
kind
of
road
map,
the
banks
are
first
and
foremost,
the
central
banks
are
really
careful
to
ensure
that
whatever
they
do,
they
don't
create
problems
for
the
existing
systems.
Right
I
mean
at
the
end
of
the
day.
The
economic
well-being
of
the
country
depends
crucially
on
stability
of
the
current
system
right
and
once
they
introduce
something
new.
They
want
to
be
able
to
make
sure
that
there
is
systemic
stability
that
persists,
so
it
kind
of
broke
us
down
into
five
different
areas
that
impact
systemic
stability
forces.
A
Financial
architecture,
right,
you
know,
is
digital
currencies
that
Central
Bank
reduces
going
to
be
convertible
with
their
current
currency,
with
a
Fiat
in
most
cases
answers
yes,
right,
it's
going
to
wholesale
or
retail
focused.
Are
you
going
to
implement
it
based
on
the
one
tier
Ledger
when
all
transactions
live
in
one
Ledger
or
you're,
going
to
hear
a
two-tier
Ledger,
where
you
essentially
have
Central
Bank,
maintaining
The
Ledger,
that
aggregated
across
the
participating
payment
institutions
of
Banks
and
then
each
Bank
maintain
its
own
retail
Ledger
that
rolls
up
into
their
Central
Bank
ledger?
A
So
there
is
different
schools
of
thought
on
that
in
different
countries.
There's
policy
choices
again.
How
do
you
control
the
supply?
Is
it
quantity
controlled
or
is
it
price
which
equivalent
means
essentially
interest
rates,
and
what
does
it
mean
to
for
bank
accounts?
You
obviously
don't
want
to
undercut
and
have
people
pull
money
out
of
the
commercial
bank
accounts
right.
There's,
privacy
issues,
Financial
inclusion
issues,
roles
of
Central,
Bank
versus
private
institutions.
Was
it
existing
commercial,
Banks
or
newly
created
institutions?
A
You
know
there
is
a
merchant,
maybe
an
abortion
somewhere
without
connection
and
then
be
able
to
settle
that
into
this
updated
into
cbdc
Ledger
at
a
later
point,
but
ensuring
that
again,
nobody
can,
you
know,
refute
the
payment
and
at
the
same
time
you
cannot
double
spend.
So
there
are
some
interesting
protocols.
Visa
has
published
a
very
interesting
paper
on
the
topic
which
we
are
following,
suggesting
some
mechanisms
for
that
now.
You
look
also
when
you
know
at
the
broad
impact
of
cbdc
technology
across
the
different
aspects
of
the
financial
system.
A
It's
not
just
a
central
bank
you're
going
to
have
either
commercial
Banks
or
payment
service
providers
involved
and
they're
going
to
need
to
participate
in
deploy
technology
and
The
Regulators
as
well
right,
there's,
sometimes
Financial
regulation
is
within
the
central
bank
and
other
countries.
It's
a
separate
function,
so
we
kind
of
broke
down
the
you
know
stack.
A
Then,
if
you
have
the
money
system
on
top
oversight
and
Regulatory
surveillance,
so
you
know
the
banks
and
the
payment
interface
providers,
don't
need
to
worry
about
it,
but
Financial
regulators
and
central
banks
certainly
do.
And
then
you
have
various
applications
that
will
need
to
be
deployed
across
this
entire
ecosystem
with
this
financial
crime
and
risk
management
applications,
customer
experience,
currency
management,
which
is
obviously
Central,
Bank
application
and
so
on.
And
finally,
you
have
the
actual
user
experience
versus
a
mobile
device.
So
you
know
web
applications
and
so
on.
A
So
in
this
kind
of
a
stack,
we
start
by
essentially
positioning
Oracle
blockchain
platform,
which
is
hyperledger
fabric
that
we
have
in
built
with
a
lot
of
additional
capabilities
and
functionality.
So
if
you're
familiar
with
capital
fabric,
you
have
the
peer
nodes
that
maintain
copies
of
The
Ledger
around
smart
contracts,
there's
ordering
service
which
is
responsible
for
creating
the
blocks
by
aggregating
user
transactions,
and
there
is
Fabrics
here
which
provides
membership
services.
It
essentially
manages
identities
and
creates
x509
certificates
for
everybody.
A
We
have
added
operations
capability
for
monitoring
management,
Etc
API
Gateway
for
integration
through
the
rest,
apis
and
events,
to
make
it
easier
to
integrate
with
this
environment
and
pre-assembled
all
of
the
underlying
capabilities
that
you
need
to
make
this
really
work
in
one
environment,
so
it's
kind
of
blockchain
as
a
service.
If
you
will
level
offering
that
is
available
in
Oracle
Cloud,
as
well
as
on
premises,
it's
open
in
terms
of
interoperability.
This
has
a
non-oracal
hyperledger
fabric
node.
A
So
we
have
a
number
of
customers
today
who
are
deploying
across
multiple
clouds
or
multiple
fabric
providers.
If
you
will
a
lot
of
integration
capabilities
in
addition
to
rest,
API
events,
open
source,
client,
sdks
that
come
from
hyperledger
fabric,
as
well
as
various
integration
adapters
for
many
systems
in
you
know,
oracle
and
third
party
systems
on
premises
in
the
cloud
a
lot
of
Automation
and
then
most
recently,
we've
created
some
development
tools.
We're
actually
going
to
do
a
demo
of
the
launch
if
you
have
a
session
on
low
code
tool,
called
blockchain
app
Builder.
A
A
You
know
so
we
have
started
working
on
cbdc
after
this
came
out.
Visit
organization
support
an
earlier
session.
Michael
Klein
from
Accenture
talked
about
token
taxonomy
framework.
That's
what
we're
actually
using
as
a
specification
layer
in
our
blockchain
up
Builder
to
be
able
to
Define
fungible
tokens
and
later
on
non-fungible
tokens
and
based
on
the
templates
that
you
can
specify,
and
you
can
select
specific
behaviors.
You
can
add
custom
properties
and
so
on.
A
So
now
that
you
have
this
kind
of
capability
right,
we
can
easily
customize
it
to
support
actual
cbdc
environments
and
roles
in
the
Central
Bank
environment.
You
have
multiple
parties
typically
involved
in
minting
issuing
approval
processes
transfer
to
the
commercial
Banks,
and
all
of
that,
so
we
have
to
cater
to
multiple
users.
Multiple
roles
with
role-based
security
and
an
ability
to
also
extend
it
on
a
custom
basis
for
particular
integration
requirements.
That
might
be
important.
A
So
in
the
wholesale
platform
the
sandbox
I
mentioned
earlier
right,
we
essentially
have
four
main
parts:
it
is
the
onboarding,
whereas
accounts
can
be
opened
and
set
up
and
rolls
assigned
the
score
money
system,
management
to
be
able
to
issue
and
burn
or
retire
funds
and,
of
course,
monitors
the
status
and
Central
Bank
wants
a
lot
of
statistics
about
that.
That's
the
actual
payment
transactions
between
the
accounts
between
xantages,
whether
it's
Banks
or
individuals
and
then
finally,
fraud
prevention,
AML,
CF
team,
wanted
to
counter
counter
financing.
A
A
The
sandbox
consists
of
a
few
different
services
in
Oracle
Cloud,
so
this
is
basically
a
cloud-based
deployment,
primarily
starting
with
a
blockchain
platform
via
database
and
analytics
identity
management,
of
course,
and
then
some
tools
for
integration
and
visual
build
is
a
local
development
tool
for
web
uis,
mobile
uis
or
whatever
applications
need
to
be
developed
and
developed
in
that
environment.
And
then
you
have
connectivity
to
both
Central
Bank
on-premise
systems
and
individual
participating
Banks
when
we
deploy
it
and
the
blockchain
network.
A
This
is
all
good
and
well
when
you
talk
about
a
single
T
environment,
but
when
you
have
to
think
about
Hybrid
models,
or
you
know,
pulled
models
right
in
a
direct
model,
you
basically
have
all
of
these
users
and
their
Ledger
transactions
all
appear
at
the
central
bank,
so
Central
Bank
can
see
every
single
transaction
in
a
hybrid
model.
You
sort
of
hear
the
same
thing,
but
not
in
real
time,
so
the
banks
maintain
their
own
Legends
and
then
they
synchronize
them
out
to
the
central
bank.
A
If
one
of
those
Banks
fails,
there
is
a
Time
vendor
when
their
transactions
are
not
yet
available
at
the
central
bank,
which
creates
some
risks
right.
So
you
kind
of
want
to
make
sure
that
that
synchronization
happens
fairly
frequently
right.
You
know
the
level
of
seconds
and
minutes.
You
then
have
a
pooled
model
and
with
Bank
of
England
called
the
pulled
model
where
you're
only
here
with
the
central
banks,
The
Ledger,
representing
the
bank
balances
and
the
individual
account
and
individual
Ledges
here
are
maintained
by
the
individual
institutions.
A
Another
cbdc
back
in
money,
which
is
sort
of
a
really
misnomer,
I,
don't
even
want
to
spend
time,
and
that's
that
creates
the
most
amount
of
risk
in
the
system
right
when
the
retail
banks
allow
to
use
cbdc
to
create
their
own
money,
basically
right,
so
they
get
certain
Reserve
in
cbdc
and
they
can
create
10
times
100
times
as
much.
Nobody
will
trust
that
that's
theoretical
capability,
but
not
really
ones
that
we've
seen
anybody
interested
in.
A
A
On
top
of
that
right,
they
could
be
either
existing
Banks
or
Central
Bank
at
the
side
to
make
them
a
separate,
Chartered,
Bank
kind
of,
is,
you
know,
different
Charter,
whereas
they're
not
allowed
to
engage
in
lending
or
monetizing
transactions
or
other
things,
but
over
these
things
like
scalability
resilience.
All
of
those
are
important
considerations,
and
so,
in
order
to
be
able
to
charge
this,
we
have
to
create
a
system
that
can
allow
multiple
shards
to
exist
and
run
in
parallel.
A
But
at
the
same
time,
we
have
this
tension
because
we
want
to
provide
immediate
finality,
so
if
Alice
makes
a
payment
to
Bob
and
both
of
the
accounts
on
the
same
chart,
that's
easy.
You
just
make
an
atomic
update
on
the
chart,
but
what
happens
if
the
accounts
on
different
charts
right
as
they
go
through
the
different
payment
interface
providers?
So
that's
a
challenge
right,
immediate
payment
finality
and
cross
charge
updates.
Don't
usually
work
together.
Very
well.
So,
in
order
to
solve
this,
we
need
to
come
up
with
a
system
that
allows
us
to.
A
You
know
essentially
provide
immediate
finality
without
waiting
for
the
cross
chart,
update
right
and
so
the
work
with
a
partner
to
create
this
set
of
capabilities,
a
design,
basically
that
combines
an
account
based
and
token
based
money
system
in
a
hybrid
environment.
Essentially
what
it
does
is
that
the
global
State
and
the
accounts
are
charitable
across
the
multiple
channels.
Let's
say
if
you
use
carpetual
fabric
as
an
example,
but
at
the
same
time
there
is
no
cross-shared
update
required
for
the
actual
payment
at
the
time
of
payment.
A
In
order
to
achieve
the
finality,
we
have
essentially
a
single
immediate
settlement
within
a
single
shark,
and
to
do
that,
we
maintain
two
forms
of
an
object,
an
account
which
represents
accumulated
balance
right.
So
you,
like
your
total
Wells
and
something
called
the
check
which
is
like
a
token.
It
represents
a
transfer
of
certain
amount.
A
So
the
way
that
this
you
know
fundamentally
works
is
that
let's
say
you
have
short
day
where
Alice
has
account
and
short
B
web
application
account.
So
when
you're
doing
an
immediate
payment,
you
essentially
you
know
deducting
whatever
the
Delta
payment
is
from
Alice's
account
and
you're,
creating
a
check
and
transferring
the
ownership
of
that.
Just
like
you
do
in
a
token
based
system
to
Bob.
So
all
the
green
boxes
are
owned
by
Bob
and
all
of
the
purple
ones
owned
by
Alice.
A
So
at
this
point,
Bob
has
multiple
checks
floating
around
different
shards
Plus,
his
own
account,
of
course
right,
and
so
there
is
a
merge
phase
following
that
immediate
payment
phase
that
consolidates
all
of
those
checks
on
a
regular
basis.
This
could
be
as
frequent
as
you
know,
seconds
or
depending
on
the
circumstances
and
the
requirements
into
Bob's
account
so
as
when
Bob
needs
to
make
a
payment.
A
If
the
application
he
is
using
his
access
to
be
able
to
scan
and
find
all
of
those
checks,
you
could
use
that
check
and
just
you
know,
assign
ownership
to
somebody
else
and
say
you
know:
Bob
is
paying
to
Chris
or
they
could
make
a
payment
from
their
account
as
long
as
there's
sufficient
balance
there,
and
so
this
combination
is
really
something
that
allows
us
to
provide
scalability
with
multiple
shards.
Without
necessarily,
you
know
delaying
the
payment
introducing
additional
latencies.
A
So
you
know
we
are
solving
essentially
the
payment
finality
issue.
Here,
the
you
know,
checks
emerged
on
whatever
policy
control
frequency
you'd
want.
There
is
basic
messaging
streaming
kind
of
a
capability
that
can
be
used
to
consolidate
the
checks
back
into
the
balance
for
each
account
on
a
very
you
know,
rapid
basis.
In
some
cases
it
may
be
important
in
other
cases.
You
know
it.
A
It
may
not
be
that
important,
but
when
you
think
about
it,
when
you
combine,
when
you
combine
the
token
and
account
system
together
and
you
get
this
hybrid,
you
have
the
benefit
of
Both
Worlds.
You
have
the
immediate
finality
and
scalability
which
you
cannot
get
with
the
direct
with
just
accountable
system,
but
at
the
same
time,
if
you're
using
just
token
system,
you
also
have
certain
issues,
because
you
don't
know
at
any
given
time
what
the
total
balance
is.
A
Therefore,
you
cannot
impose
any
kind
of
capsule
limits
in
order
to
maintain
the
total
amount
of
currency
per
count.
Let's
say
some
country
might
decide.
Is
it
going
to
issue
Central,
Bank,
digital
currency
and
individuals
may
be
allowed
to
maintain
up
to,
let's
say
10
000
units,
whatever
it
is
right?
A
Now
the
privacy
and
confidentiality
is
very
important
right.
So,
if
you
look
at
it
in
a
environment
where
you
have
complete
privacy
in
crypto
world
today,
you
have
essentially
cryptographically
secured
privacy.
It's
you
know
secured
through
actual
cryptography
in
a
traditional
payments
in
the
banks,
you
rely
on
the
institutional
Integrity
right.
So
it's
a
it's
a
policy
of
the
banks.
That's
not
going
to
disclose
your
information,
but
it's
only
a
policy.
A
rogue
employee
who
has
access
to
the
data
could
actually
leak
the
data
right.
A
There
is
no
cryptographic
controls
necessarily
right
and
it
could
be
easily
recurable,
so
it
will
ask
an
amount
process
controls,
but
it
doesn't
rely
on
cryptography.
So
what
you
wanted
to
come
up
with
is
a
solution
in
the
middle
that
would
be
refer
to
as
contextual
privacy,
where
the
Privacy
is
cryptographically
secured
up
to
a
certain
point
using
pseudonymous
accounts,
so
you
have
essentially
accounts
controlled
by
users,
but
at
the
same
time
time
there
is
ability
to
request
a
linking
or
decryption.
A
If
you
will
of
that,
pseudonymous
account
in
a
manner
that's
transparent
and
auditable
in
order
to
avoid
any
kind
of
abuses
right
and
it
enables
privacy
for
a
vast
majority
of
transactions,
but
at
the
same
time
allows
Banks
central
banks,
in
particular,
to
apply
AML
rules
and
other
kind
of
regulatory
regimes,
particularly
when
they
have.
You
know
legal
enforcement
and
other
things
warrants.
What
have
you
for
various
investigations?
They
have
a
process
that
allows
them
to
get
access
to
this
information.
A
Links
that
to
the
anonymous
account,
but
in
a
manner
that
will
be
transparently,
visible
and
non-refutable,
so
that
will
provide
the
control
if
you
will
or
when
you
know,
to
protect
against
any
abusers.
So
this
is
based
on
what's
called
privacy,
preserving
accountable,
decryption
pad
from
sw7
and
implemented.
In
our
blockchain
platform,
there
is
basically
a
mechanism
that
involves
trustees
and
multi-party
computations,
so
there's
multi
there
is
mult
the
keys
that
Alice
uses
to
essentially
set
up
initial
accounts.
A
private
key
is
sharded
across
multiple
trustees,
and
then
there
is
a
request.
A
Let's
say
in
this
case
you
know
Bob
I
know
some
kind
of
government
regulator
needs
to
request
a
decryption.
They
send
the
request,
and
there
is
this
blockchain
Ledger,
whereas
the
request
is
submitted
so
that
it's
visible
Etc
and
the
interest
is,
can
provide
using
threshold
encryption
mechanisms
sufficient
number
of
shards
to
satisfy
the
decryption
request.
A
So
when
we
apply
to
cbdc,
basically
we
allow
users
to
generate
their
pseudonymous
accounts.
Still
Alice
will
go
through
a
kyc
process.
Normally,
as
a
payment
service
provider
will
have
that
information
associated
with
scare
identity.
But
then,
when
the
account
is
set
up,
it's
not
linked
right,
but
at
the
end,
then
you
know
Alice
can
regenerate
those
pseudonyms
if
she
needs
to
and
when
she
sucks
she
uses
the
pseudonymous
account
information,
but
regulator
can
request
a
decryption
when
necessary
and
then
again
it's
they're
held
accountable
through
the
blockchain
right.
A
The
way
that
the
mechanism
works.
There
is
onboarding
process
where
there
is
a
user,
initially
comes
in
this
payment
interface
provider
and
goes
through
the
KFC
process.
And
then
there
is
anonymous
process
to
set
up
pseudonymous
account
sharing
the
keys
with
a
trustee
system
which
could
be
regulated
by
variety
of
other
regulators
and
so
on,
and
then
there
is
an
unlocking
request.
Let's
say
you
have
a
rule,
you
know
in
U.S,
for
example,
Banks
you
have
to
just
close
on
your
transactions
that
exceed
ten
thousand
dollars
right.
A
So
let's
say
we
have
a
payment
here:
twelve
thousand
dollar
payment
being
made
well,
the
interest
provide
the
payments
provider
here
can
do
a
can
put
a
request
to
find
the
owners
of
the
account
from
and
two
right
and
they
get
back.
Then
the
key
is
necessary
to
decrypt
as
they
get
the
decryption
and
then
they
can
check
with
the
AML
system
sanction
systems.
A
Etc
is
this
okay
allowed
or
not,
and
then
they
can
go
ahead
and
do
a
transaction
you
know,
send
the
transaction
basically
forward
it
to
The
blockchain
Ledger
using
those
predominals
accounts.
If
it's
fine
and
at
that
point
they
can
also
do
logging
Etc
if
they
need
to
so
this
is
exception
based
if
you
look
contextual
privacy
and
of
course
you
want
to
use
blockchain
for
it,
not
necessarily
a
public
blockchain
that
could
be
a
permission.
Blockchain
that's
operated
by
certain
Regulators
based
on
legislative.
You
know,
rules
and
so
on.
A
But
you
know
users
also
can
be
provided
access.
So
if
viruses
accounts
been
subject
to
that,
she
can
be
provided
access
to
see
who
what
why,
when
and
so
on,
it
also
supports
ability
to
protect
privacy
when
you're
finding
an
account.
So
when
you
are
transferring
initial
money
into
a
cbdc
account,
you
don't
want
that
to
be
linked
with
your
bank
account
from
which
you're
transferring
so
this
mechanism.
You
know
today,
when
you're
doing
it
without
this
bad
system
bank
has
this
Association
right
and
now
RS.
This
here
bank
account
transferred
money
into
this.
A
You
know
Anonymous
account,
but
in
this
environment
this
pad
we
can
actually
contribute
one
to
a
bank
owned
or
Pap
owned
account
right,
that's
done
without
any.
You
know,
protection,
perhaps
protection,
but
then
she
has
here
on
the
counter
she
can
request.
She
gets
a
claim
check
and
then
she
can
use.
You
know
her
pseudonymous
account
to
request
transfer
from
that
pip
account
and
that
becomes
an
anonymous.
A
So
we
have
put
together
the
sandbox
that
essentially
brings
together
all
of
those
capabilities
where
you
start
with
the
wholesale
Bank
Network.
You
can
extend
it
for
retail
capabilities.
You
have
the
spat
systems,
it
manages
the
secrets
and
then
you
have
the
regulator
as
well
with
the
applications
and
so
on,
and
you
can
kind
of
go
through
this
entire
life
cycle
I'm
running
a
little
short
on
time
here
so
I'll.
Just
summarize
here.
A
What
we
tried
to
do
was
to
essentially
solve
real
world
problems
right
talking
to
Banks
certain
central
banks.
In
particular,
we
find
what
worries
them
about
implementation
of
cbdc
right
and
where
we
can
provide
pre-built
out
of
the
box
solutions
to
try
to
do
that
so
starting
with
Skype
energy
fabric,
which
provides
very
strong
capabilities
to
begin
with.
You
know:
Linux
Foundation,
best
practices,
the
community,
flexible
identity
management,
transaction
verification
model.
A
All
of
those
things
configuration
control,
privacy
models
which
are
much
stronger
than
any
other
blockchain
framework,
and
then
we
layer
a
lot
of
Oracle
kind
of
specific
enhancements.
We
have
done
for
Bank
grade
platform
with
flexible
pki.
Banks
often
prefer
to
use
their
own
pki
rather
than
self-signed.
A
A
Do
you
have
the
capability
for
private
sector
entities
to
use
that
cbdc
in
smart
contracts
in
annual
yeah
yeah,
so
so
in
hyperledger
fabric,
everything
that
you
do
on
The
Ledger
itself
is
implemented
as
a
smart
contract
right.
Smart
contract
is
a
business
logic
and
now
token
system
is
implemented
using
smart
contracts.
So
the
transfers
minting
issues,
that's
all
methods
in
chain
code
and
smart
contracts.
You
can
then
add
additional
complexity.
A
On
top
of
that,
with
you
know
a
novel,
you
know
payment
mechanisms,
if
you
will
contextual
or
contingent
payments
or
other
things
right
through
smart
contracts
running
on
top
of
the
core
sdks
that
we
provide
so
our
smart
contracts
that
we
Implement
and
we
generate
from
the
blockchain
app
builder.
In
fact,
I'll
invite
you
to
the
session
in
the
afternoon
we're
going
to
be
generating
some
smart
contracts,
essentially
an
SDK
layer.
If
you
think
about
it
that
way,
and
then
you
can
Implement
your
own
smart
contracts
on
top
invoking
those
methods.
A
A
About
smart
contract
support,
so
I
don't
see
Revenue
that
if
you
do
this
kind
of
sharding,
then
you
can
still
use
Smart
contracts
because
that
State
synchronization
between
the
shards.
So
so
the
idea
is
that
you
don't
need
to
do
an
atomic
transaction
across
a
shards.
So
you
have
separate
smart
contracts
on
different
charts,
a
different
Channel,
and
then
you
have
an
application,
an
orchestration
layer
that
con
that
can
coordinate
between
them
across
them
right
and
there
is-
and
there
is
a
organization
we
basically
have
a
two-phase
commit
protocol
that
we've
implemented.
A
A
A
So
we
can
support
private
keys
in
two
ways:
right
One
is
using
custodial
accounts
where
we
actually
manage
the
private
keys
for
the
user.
Most
users
who
are
outside
of
a
crypto
World
actually
find
the
process
of
managing
crypto
keys,
reissuing
them
and
all
of
that
quite
complex
right.
So
we
try
to
provide
custodial
capabilities,
but
we
also
have
the
capability
Oracle
Cloud.
A
He
has
historical
Vault
KMS,
where
users
can
create
their
own
keys
and
then
they
can
maintain
them
and
they
can
sign
all
the
transactions
outside
and
send
them
through
the
hypology
fabric,
client
sdks.
So
the
SDK
allows
for
external
external
design
transactions.
This
is
private,
key,
so
private
keys
and
always
remains
under
user's
control.
A
If
I
own,
my
private
key
I,
generate
on
my
side
the
the
Privacy,
how
you
can
decrypt
my
transaction.
If
someone
wants
to
okay.
So
when
you
register
an
account,
you
actually
send
a
Certificate
request
on
Capital
fabric,
as
there
is
a
CA
right.
So
you
generate
your
private
public
key
pair.
You
create
a
CSR
as
a
public
key.
You
register
as
a
client
right
and
then
your
identity
with
that
certificate
and
the
public
key
is
stored
and
available
in
the
blockchain
Suzanne.
A
A
Yes,
so
high
reliability
is
achieved
by
replicating
the
environment
for
resilience
across
multiple
data
centers
in
Oracle,
Cloud
environment.
We
typically
in
each
region
in
like
Magic
City,
for
example,
right
London.
We
support
multiple
data,
centers,
usually
like
20
kilometers
apart,
and
they
create
what
we
call
availability
domains
right.
So
when
we
deploy
the
blockchain
platform,
we
have
two
flavors,
one
of
them
just
small
development
environment,
but
the
Enterprise
environment
automatically
distributed
across
those
three
availability
domains
out
of
the
box.
A
So
you
I
think
it
depends
on
scalability.
We
do
have
a
two-phase
computer
concentration,
where
you
could
do
a
rollback,
but
in
the
environment,
where
you
need
to
be
able
to
support
massive
scale,
millions
of
transactions
per
minute
or
I,
don't
know,
I
haven't
thought
about.
The
numbers.
I
have
to
go
back
and
figure
out
if
this
gets
adopted
in
India
with
1.3
billion
people.
A
What
kind
of
scale
they're
going
to
talk
about
over
the
next
few
years,
but
you
can
also
do
compensating
transactions
as
well,
if
necessary,
right
and
in
a
retail
environment
that
might
scale
better
but
generally
against
the
messaging
and
the
orchestration
of
those
checks
by
adding
them
into
account
balances
that
whole
process
is
resilient
on
its
own
right.
So,
of
course
nothing
is
100.
You
know
in
computer
science
we
always
live
a
little
room.
You
know
something
can
always
happen,
but
generally
that
process
itself
is
built
to
be
resilient.
A
All
right
well,
thank
you
for
attendance
and
taking
the
time
we
have.
You
know
more
information
available
if
you're
interested
on
oracle.com
blockchain,
that's
kind
of
our
main
page,
there's
also
blogs
rhetorical.com,
and
then
you
can
also
go
and
actually
play
with
some
of
the
blockchain
technology
free
in
our
Cloud.
We
have
free
sign,
ups,
I,
think
it's
something
like
30
days,
300
credit.
You
can
experiment
and
you
can
download.
We
have
an
on-premises
version
as
well
when
you
call
OBP
and
the
presentations
there
are.