We might want to consider scenarios whereby the CBDC network has to be taken offline due to a widespread ransomware or cyber warfare situation. In a situation like this, two options might be considered:
1) Pause the use of issued CBDCs until the issue at hand has been resolved (meaning the CBDCs which were already issued are still good but the Fed stops issuing new digital dollars). However, this leads to few downstream questions:
a) Does this pause cause a significant interruption in general public usage for people who have stated to use the digital dollar as their primary manner of money and do not easy have access to Fiat money?
b) Can the existing owners of digital dollars be issued equivalent physical dollars while the issue is being resoled?
i) How do you ensure that the digital dollars being converted are totally valid?
ii) Would there be a limit to how much digital money can be converted without causing a bank run?
2) Allow existing holders of CBDCs issued thus far to continue to use this money in an offline mode (and do not issue any new CBDC money):
a) Can these offline transactions be recorded in trustable side chains, which could be synced with main trunk after the freeze is taken off?
b) Can wallets provide safe and trustable offline capabilities whereby holders of CBDC money can expend money they have in their wallets and those transactions are recorded on failover side chains or oracles? Do these side chains introduce additional risk now that they are the weaker link the chain (think Axie and Ronin).
1 Comment
Sandy Aggarwal
We might want to consider scenarios whereby the CBDC network has to be taken offline due to a widespread ransomware or cyber warfare situation. In a situation like this, two options might be considered:
1) Pause the use of issued CBDCs until the issue at hand has been resolved (meaning the CBDCs which were already issued are still good but the Fed stops issuing new digital dollars). However, this leads to few downstream questions:
a) Does this pause cause a significant interruption in general public usage for people who have stated to use the digital dollar as their primary manner of money and do not easy have access to Fiat money?
b) Can the existing owners of digital dollars be issued equivalent physical dollars while the issue is being resoled?
i) How do you ensure that the digital dollars being converted are totally valid?
ii) Would there be a limit to how much digital money can be converted without causing a bank run?
2) Allow existing holders of CBDCs issued thus far to continue to use this money in an offline mode (and do not issue any new CBDC money):
a) Can these offline transactions be recorded in trustable side chains, which could be synced with main trunk after the freeze is taken off?
b) Can wallets provide safe and trustable offline capabilities whereby holders of CBDC money can expend money they have in their wallets and those transactions are recorded on failover side chains or oracles? Do these side chains introduce additional risk now that they are the weaker link the chain (think Axie and Ronin).