Digital assets and new forms of money on programmable platforms (DLT) are an emerging phenomenon that is increasingly gaining attention in various global forums and research initiatives, both from academia, international organizations, and the financial industry itself.

For the Central Bank, these developments raise questions regarding their scope and impact on the financial system and the economy as a whole. Proof-of-concept projects in this area allow for the analysis of these advancements not only from a theoretical perspective but also from a practical standpoint, considering the Central Bank’s mandate to ensure the proper functioning of domestic and international payments, while promoting the stability and efficiency of the financial system.

What does the proof of concept consist of?

The Central Bank of Chile is currently conducting a proof of concept that involves deploying and operating a programmable platform based on blockchain technology. This platform will enable the simulation of the issuance of a central bank digital currency (CBDC); the transfer of CBDC between fictitious agents; and the redemption of this currency, in addition to integration with tokenized asset use cases. It is important to emphasize that this proof of concept does not, under any circumstances, represent a decision to issue a digital currency, but rather a controlled experiment.

Blockchain

Central Bank Digital Currency

Tokenized Assets

Smart Contracts

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Blockchain

 

• The deployment and management of a private blockchain will be tested, which will allow us to develop and deploy smart contracts, as well as enhance our understanding of the technology and its applicability.
• We will test how to create and manage accounts for different participants using this technology and evaluate the management of cryptographic keys.
• We will conduct tests for recording transactions on the blockchain through the execution of smart contracts and interaction with wallets.

Central Bank Digital Currency

 

• A simulated issuance of a central bank digital currency will be tested through a smart contract.
• The transfer of CBDC from the Central Bank of Chile to fictitious agents will be tested.
• The transfer of CBDC between fictitious agents will be tested.
• The elimination of CBDC will be tested, removing the currency from circulation (burn).

Tokenized Assets

 

• The tokenization of a fictitious money market instrument will be tested, simulating that it was issued by an agent.
• Once the instrument’s maturity date is reached, the system will validate the list of the holders and execute the corresponding payment in CBDC.

Smart Contracts

 

• A smart contract will be developed to enable atomic settlement, also known as delivery versus payment (DVP).
• We will simulate the execution of a transfer through a delivery versus payment mechanism between the money market instrument and the CBDC.

Hallazgos: atributos, trade-offs y limitaciones

La prueba de concepto permitió evaluar, en un entorno acotado y controlado, la factibilidad tecnológica de emitir MDBC mayorista y utilizarla como activo de liquidación. Junto con ello, hizo visibles atributos y trade-offs asociados a las decisiones de diseño adoptadas. Estos hallazgos se presentan a continuación: 

Integración operativa: la convergencia de MDBC y activos financieros en una misma plataforma simplifica la operación y reduce la dependencia de múltiples infraestructuras y de la mensajería externa entre sistemas, habilitando la liquidación atómica.

Flexibilidad y programabilidad: los contratos inteligentes permiten incorporar nuevas lógicas de negocio, instrumentos u operaciones sobre la misma MDBC, sin rediseñar la infraestructura base.

Privacidad: la transparencia e inmutabilidad propias de las redes DLT conviven en tensión con la confidencialidad que exigen los mercados financieros sobre posiciones y flujos; las soluciones aplicadas abordan esta tensión pero agregan complejidad y pueden limitar la ampliación de la red.

Gobernanza: el diseño explorado, con el BCCh operando la totalidad de los nodos, facilita el control de integridad y confidencialidad, pero concentra funciones hoy distribuidas entre instituciones y limita beneficios como la resiliencia.