Discuss whitepaper on CBDC sparked by the eThaler project. The authors are Mani Pillai (otc*Digital & Vipin Bharathan dlt.nyc and advisor to otc.Digital), eThaler received a lot of interest in the press and in many other venues, including among central bankers. There will be a demo of eThaler at a later meeting. The whitepaper is still in draft. Please read it (or skim it as it is a 36 page paper) and we are eager to hear your comments for improvement. The paper was sent out as an attachment to the group. A new direction in the implementation of an integrated CBDC solution is proposed in the whitepaper. The whitepaper is not just words, implementation of some of the components are available in hyperledger labs and elsewhere. We hope to change the conversation around CBDC towards open standards and open source.

The draft version of the paper is available. Please provide reviews and comments on the whitepaper below.


Review:

  1. @Daniel Schwartz - CDM is for derivatives and does not have much take-up what makes it relevant in this context? Further points that Daniel made...
    1. CDM is for OTC products (not identifiable products, i.e. one with cusips, etc) 
    2. CDM is also for longer term contracts (Not one day contracts) 
    3.  Answers:
      1. CDM extensions into EQD and FXO are no longer confined to OTC (See Mani's comment below: 

        CDM is now being adopted by multiple industry associations such as ISLA, ICMA and FinOS to address FX Options, Repos, Security Finance etc. )

      2. Longer term contracts using CDM can result in an economic event that can trigger payments on the CBDC or other payment networks. Having a product lifecycle contract (not message based instructions like ISO20022) can result in these economic events linked to multiple payments. CDM does not directly address payments.

Dual Networks:

The climate SIG  independently came up with the dual network idea: although in a different context and framework https://wiki.hyperledger.org/display/CASIG/Virtual+Community+Renewable+Energy+Network

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6 Comments

  1. mani pillai

    CDM does not currently address payments processing, it provides a good framework for any type of financial product life cycle including payments. 


  2. mani pillai

    CDM is now being adopted by multiple industry associations such as ISLA, ICMA and FinOS to address FX Options, Repos, Security Finance etc. 

  3. Si Chen

    Vipin Bharathan Thanks for following what we're doing with the Virtual Renewable Energy Network Project.  Are you saying that the tokens for carbon offsets and renewable energy certificates should follow the token taxonomy framework?  If so do you have something that describes it in more detail?  I saw how the eThaler formula is​ tF{d,t,p,c,SC} 

    On the other side, do you think the utility bills would fit into a CDM?  Or some other framework?

    1. Vipin Bharathan

      TTF already has a Carbon Emissions token defined. Marley is giving a talk on this on Thursday.

      See

      https://github.com/InterWorkAlliance/TokenTaxonomyFramework/tree/master/artifacts/token-templates/specifications/CET/latest

      For Carbon Emission token.

      The formula is also available on github.

      CDM maybe too heavyweight for invoices, in our solution CDM is used only in the B2B setting. There are standards for invoices that may be more in the B2C space. The main idea in our paper is to split the contracts and tokens into their own virtual ledgers (they can be combined in the same physical ledger- however the ledger has to have capabilities to house both contracts and tokens)

      Contracts are usually bilateral and tokens have to be accessible to all participants to be able to trade, exchange etc.


      For example here is a catalog of invoicing standards:

      https://fedpaymentsimprovement.org/wp-content/uploads/catalog-electronic-invoice-standards.pdf

      1. Si Chen

        OK thanks.  So the TTF covers how the carbon emissions token should behave (it's divisible, transferable, mintable, and has roles), as opposed to say a carbon offset token which may be divisible, non-transferable (since it should be retired by the buyer), mintable and has roles.  Then what data fields go into the carbon emissions of offset token is determined based on the actual transaction taking place?

        1. Vipin Bharathan

          Like in most ESG tokens we need two sets of items (or pointers to two items) (in addition to standard ones like issuer etc.)

          a. What are the metrics backing the token?

          b. What are the attestations/certifications backing these metrics?

          I believe that CET has some such attributes- Have not looked closely at the attestations/certifications.

          There was a meeting of the IWA sustainability Business working group today- we should move this conversation elsewhere since this is a review page for the CBDC paper.