President Joe Biden of the United States has tasked the Office of Science and Technology Policy (OSTP) with finalizing the designs for the country’s 18 CBDC systems.
Reports on 18 CBDC Design Options Submitted by OSTP
Central bank digital currency (CBDC) may be implemented soon as the United States government keeps studying the idea.
As President Joe Biden requested, the OSTP has delivered its evaluation of the 18 CBDC design templates for the United States. In addition, six distinct areas of the digital asset were examined. There are actors, rules, safety, commerce, data, and alterations. The OSTP also provides insights about the challenges and restrictions of developing a permissionless system.
Data analysis, however, suggests that CBDC is governed by a central authority and has official approval.
The purpose of the OSTP report was to provide guidance to U.S. policymakers as they determined the optimal approach. The paper also outlined the drawbacks of utilizing two distinct design alternatives that included including other parties. It is the token’s interoperability and its transport layer that determine the kind of participant.
Issues related to governance were discussed in the report, including permission, identity privacy, access tiering, and remediation.
The Office of Science and Technology Policy urges further consideration of a number of key aspects by policymakers. Cryptography, trustworthy hardware, signatures, transaction anonymity, and other related technologies fall within this category.
Have We Reached CBDC Readiness in the United States?
In other words, the OSTP report is not the final version of the suggestions. Instead, it’s an alternative design that should be considered by politicians before being implemented. The technical analysis suggests that the OSTP prefers a United States-wide off-ledger, hardware-secured CBDC system.
Moreover, the OSTP proposed keeping an eye on and policing the CBDC project way back at the start of the month. The paper also assessed the power consumption and carbon footprint of virtual currencies in the USA.
The Office of Technology Assessment and Strategic Planning estimated that crypto mining consumed 50 billion kilowatt hours of electricity in the United States in 2017. That’s almost 38% of total crypto sector energy use worldwide.
Bitcoin and Ethereum spent less than 1% of the energy that card payment service providers like Visa and Mastercard did in the same year. Despite facilitating corporate operations and executing more on-chain transactions than crypto networks, this is the case.
Ether may be considered a security product, as was recently revealed by Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC). This comment was delivered by Gensler a few hours following the finalization of the much-anticipated Merge.
Proof-of-Stake (PoS) cryptocurrencies are essentially all securities, in his view. The chair of the SEC has pointed out that people who engage in Ether staking dump their cash in the hopes of making a profit. The Howkey Test classifies these transactions as “securities.”
However, some experts in the field have been forthcoming about the increased scrutiny Ethereum would face from regulators after the Merge.
The transition from the Proof-of-Work (PoW) consensus mechanism to the Proof-of-Stake (PoS) consensus protocol means that Ethereum mining is dead.
Even though the Ethereum blockchain has been split in two, the forked token, ETHW (Ethereum on PoW), will still be mined thanks to a new blockchain.