Central banks have conducted a joint experiment to explore ways to connect monetary authorities and the private sector to facilitate retail digital currency payments, according to a new report released on Friday. The Bank for International Settlements (BIS) and the Bank of England developed 33 application programming interface (API) functionalities to test more than 30 central bank digital currency (CBDC) use cases, including offline payments. This experiment, dubbed Project Rosalind, looked at how an API layer could support a retail CBDC and facilitate safe and secure payments through different use cases, said Francesca Hopwood Road, head of the BIS Innovation Hub London Centre.
The Bank of England is currently consulting on a digital pound, which it has said will likely be needed in the future. The Bank set out in its consultation that it would host the centralized ledger and the application programming interface (API) for a potential digital pound. The API would allow private sector firms to access the ledger and provide services such as automated payments.
Project Rosalind tested a diverse range of payment options such as online, offline and in-store payments via interactions with QR codes, mobile phones, smart cards and more. The project also explored the facilitation of micropayments, such as a child-parent wallet, and how payments could be made in that kind of scenario. The study also found that the API layer could work with different ledgers.
The BIS seeks to experiment in different areas to help contribute to the very important CBDC conversation at the moment. Blockchain network Quant announced its role as part of the vendor team for Project Rosalind on Friday, providing the underlying infrastructure and blockchain platform, secure smart contracts and interoperability of central bank ledgers.