Project Rosalind, a collaborative initiative between the Bank for International Settlements (BIS) Innovation Hub London Centre and the Bank of England, has successfully developed a prototype application programming interface (API) layer for retail central bank digital currency (CBDC) systems. This groundbreaking project aimed to explore the potential of connecting central bank and private sector infrastructures through a universal and extensible API layer, enabling seamless retail CBDC payments.
Over the course of the initiative, Project Rosalind delved into ecosystem innovation to identify various use cases for retail CBDCs. A total of 33 API functionalities were developed, and more than 30 retail CBDC use cases were explored. These use cases span a wide range of domains catering to individuals and businesses. They encompassed peer-to-peer transfers, retail payments for goods and services, as well as small-value business transactions.
Comprehensive Testing of Retail CBDC Payment Options
To ensure comprehensive testing, Project Rosalind examined different payment options. Retail CBDC payments were evaluated for online transactions, in-store purchases, and offline scenarios, utilizing technologies such as near-field communication, point-of-sale interactions, QR codes, mobile phones, smartcards, biometric devices, and smart assistants. The project also delved into private sector programmability and micropayments as part of the exploration.
The project’s primary focus was to develop a universal and extensible API layer that could seamlessly connect central bank and private sector infrastructures. By doing so, it aimed to facilitate retail CBDC payments and foster innovation. The project embraced a two-tier CBDC model, where the central bank issues the CBDC and provides the underlying ledger infrastructure, while the private sector offers user-facing services.
Throughout the project, valuable insights were gained into essential aspects of a retail CBDC system. These included API design, privacy models, security measures, standards, offline payments, private sector programmability, and the roles and responsibilities within the ecosystem. The collaboration with central banks, academia, and the private sector played a vital role in delivering this ambitious undertaking.
Francesca Hopwood Road, Head of the BIS Innovation Hub London Centre, expressed her enthusiasm for the outcomes of the Rosalind experiment. She emphasized that the project had made significant strides in central bank innovation by exploring how an API layer could support a retail CBDC system and enable safe and secure CBDC payments across diverse use cases.
The active collaboration with both the public and private sectors to identify and explore these use cases has been instrumental in shaping the project’s success. Hopwood Road believes that the findings of Project Rosalind will greatly contribute to global organizations’ approach to designing and engaging with retail CBDC systems.
