Blockchain application for central bank digital currencies (CBDC)

Sethaput, Vijak; Innet, Supachate

doi:10.1007/s10586-022-03962-z

Cited by 30 publications

(9 citation statements)

References 4 publications

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“…Despite these benefits, most countries are still on the discussion stage of its implementations raising concerns about several challenges include, financial stability issues and cyber security concerns [21]. The countries that have adopted central banks digital currency include China, India, Bahamas, Ukraine, and Sweden [21]. The adoptions and deployment procedures in those countries differs from the notion introduced in this study.…”

Section: 3mentioning

confidence: 83%

“…Digital currencies have many advantages over fiat currency such as: unlimited access to central bank funds despite of any physical and geographical locations, controlled by central banks, enhanced more payment diversity, boosting financial inclusions in the country, enabling cross border transactions between two countries, and facilitates tax collections [20]. Despite these benefits, most countries are still on the discussion stage of its implementations raising concerns about several challenges include, financial stability issues and cyber security concerns [21]. The countries that have adopted central banks digital currency include China, India, Bahamas, Ukraine, and Sweden [21].…”

Section: 3mentioning

confidence: 99%

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The Frameworks of Cross Border Cryptocurrency Transactions Between Two Countries

2024

IJFMR

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Cross border payments have been the biggest challenges in overseas business transactions. It is characterized by frauds, lack of security, money laundering, transactions delays, and huge transactions cost. The aim of this paper is to introduce new model of cross border digital currency transactions that would use the cryptocurrency from two different countries. The model has adopted the blockchain technology to authorize the smart contracts and proof of works under the monitoring of central banks of participating countries. In this model each country would adopt its own digital currency equivalent to the fiat/cash money value. Unlike the traditional blockchain networks which is considered to be decentralized systems, this model has deployed centralized blockchain networks under the control of central banks. All nodes in the network will be owned by central banks that would records and trace any transactions by using blockchain technology. Apart from central banks, this model includes local banks, and digital forex exchange market as their main stakeholders to serve the customers. As a centralized system, any smart contracts and proof-of-works resulted from any desired transactions is validated by the central banks of participating countries before execution. The customers have been losing their money during transactions through decentralized privately owned digital currency exchange vendors due to the lack of enough network policy to counter any fraud or suspicious transactions. Also, the cross-border transactions are encountered by the excessive of fees such as, agent fees, oversees fees, transactions fees, and exchange fees. This system is usefully to secure and speedup the transactions, prevent any frauds, and to avoid the overseas financial organizations costs that has been incurred by the customers over the years. The governments around the world would have the total control of the monetary transactions if they deploy digital currency on their economy. However, they are required to tighten the security measures to prevent any security vulnerabilities, frauds, threats, and get rid of money laundering activities.

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Section: 3mentioning

confidence: 83%

Section: 3mentioning

confidence: 99%

The Frameworks of Cross Border Cryptocurrency Transactions Between Two Countries

2024

IJFMR

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“…In addition, they conclude that no central bank has used blockchain-based CBDC thus far because of its performance, scalability, cross-chain interoperability, and usage scenarios. Similarly, Sethaput and Innet (2023) discuss the challenges encountered, technical solutions, and prospects for CBDCs, mainly blockchain or DLT applications to CBDCs, in light of the projects carried out by central banks.…”

Section: Related Workmentioning

confidence: 99%

“…If a blockchain-based technology is chosen for the use of CBDC, it is extremely important to perform these transactions with the features of resilience, robustness, continuity, security, and privacy. Otherwise, blockchain-based CBDCs are likely to have some disadvantages (Sethaput and Innet, 2023;Syed, 2023). There are many CBDC design models with their own level of privacy and security.…”

Section: Benefits and Challenges Of Blockchain-based Cbdcsmentioning

confidence: 99%

A Review of Central Bank Digital Currency: Current Status and Changing Trends

Ceylan

2024

İzmir İktisat Dergisi

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Since the emergence of the Central Bank Digital Currency (CBDC), which digitally represents the legal currency of the country in which it is created, significant developments have been experienced in the global financial environment as a result of the changes brought about by the innovations. Although CBDCs offer various advantages, such as cost reduction, financial inclusion, and increasing the efficiency of payment systems, they may create some disadvantages, such as the risk of dysfunctionalization of the banking sector or decreasing the level of security. At this point, it is necessary to be aware of the possible risks it may create and to develop an optimum strategy in case such risks arise to establish a successful CBDC system and benefit from its advantages. In this context, the aim of this study is to analyze all aspects (emergence process, positive/negative sides, projects, use cases, and technical infrastructure to be used) of this digital currency and to make a comprehensive evaluation of CBDC applications around the world. The evaluations show that many countries are not indifferent to this new digital currency, which has a very high development potential, and continue their research intensively in order not to fall behind the steps taken in CBDC.

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“…In recent years, several financial firms like Goldman Sachs, J.P. Morgan, and other banking giants have established their blockchain laboratories, collaborating closely with blockchain platforms [10]. Additionally, blockchain technology has been applied in areas such as sustainable supply chain finance, central bank digital currencies, and transaction systems using smart contracts [11]. The technology's impact on the financial industry is significant, with its characteristics, performance, and advantages dramatically influencing various aspects of the industry.…”

Section: Introductionmentioning

confidence: 99%

Enhancing Zero Trust Models in the Financial Industry through Blockchain Integration: A Proposed Framework

Daah,

Qureshi,

Awan

et al. 2024

Electronics

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As financial institutions navigate an increasingly complex cyber threat landscape and regulatory ecosystem, there is a pressing need for a robust and adaptive security architecture. This paper introduces a comprehensive, Zero Trust model-based framework specifically tailored for the finance industry. It encompasses identity and access management (IAM), data protection, and device and network security and introduces trust through blockchain technology. This study provides a literature review of existing Zero Trust paradigms and contrasts them with cybersecurity solutions currently relevant to financial settings. The research adopts a mixed methods approach, combining extensive qualitative analysis through a literature review and assessment of security assumptions, threat modelling, and implementation strategies with quantitative evaluation using a prototype banking application for vulnerability scanning, security testing, and performance testing. The IAM component ensures robust authentication and authorisation processes, while device and network security measures protect against both internal and external threats. Data protection mechanisms maintain the confidentiality and integrity of sensitive information. Additionally, the blockchain-based trust component serves as an innovative layer to enhance security measures, offering both tamper-proof verification and increased integrity. Through analysis of potential threats and experimental evaluation of the Zero Trust model’s performance, the proposed framework offers financial institutions a comprehensive security architecture capable of effectively mitigating cyber threats and fostering enhanced consumer trust.

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Blockchain application for central bank digital currencies (CBDC)

Cited by 30 publications

References 4 publications

The Frameworks of Cross Border Cryptocurrency Transactions Between Two Countries

The Frameworks of Cross Border Cryptocurrency Transactions Between Two Countries

A Review of Central Bank Digital Currency: Current Status and Changing Trends

Enhancing Zero Trust Models in the Financial Industry through Blockchain Integration: A Proposed Framework

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