The Bank of Canada has identified the key entity model of the retail central bank digital currency (CBDC) to ensure a universal architecture across different platforms. The proposed prototype is included in the staff analysis report organized by Sriram Darbha and described as "including a wide range of CBDC designs"

This bank believes that the first prototype is that CBDC needs to be centralized by a physical line, which most likely refers to the sale of central banks. However, the analysis points out that several components may be combined to operate as a central institution.

The next entity model to be established is that there is no leader prototype, similar to the approach agreed in DLT. CBDC can be selected as the prototype operation of macroeconomic system zoning or external economic system zoning, or it can be operated in an immediate manner without the need for a third party.

"Our own analysis shows that no prototype has a very high score under most criteria, so it is unlikely that the design of a single prototype will achieve all policy objectives," the analysis wrote. "On the other hand, with the help of the policy objectives of the jurisdiction, policymakers need to consider a design that integrates several prototypes."

This prototype is ranked according to personal privacy, visibility, scalability, elasticity and the applicable scope of offline and online payment. In the end, centralized prototypes rank higher than other prototypes, which is also the only potential flaw of privacy issues.

Personal privacy is the bane of CBDC design

One of the biggest shortcomings of CBDC design around the world is the agonizing personal privacy test. This test has promoted the selection of more and more digital currencies (such as stable coins). However, although central banks ensure that appropriate measures are taken to maintain user information, concerns remain.

In the mass consultation of the European Central Bank (ECB) on CBDC feasibility analysis, participants included privacy issues as part of their proposal. However, Fabio Panetta, a member of the Board of Supervisors of the European Central Bank (ECB), alleviated the anxiety that "under the premise of the baseline, digital euro also gives us the same or higher level of personal privacy as personal data solutions"

The People's Bank of China (PBoC) was criticized for allegedly using digital currency as a national regulatory method, but it repeatedly denied it. This view was also echoed by US lawmakers, who warned that China is likely to use digital currency to monitor US citizenship.

The Chinese Embassy in New York rebutted some accusations, while Mu Changchun, President of the Digital Currency Research Institute of the People's Bank of China, told participants at a meeting that only limited resources and private information were used, and browsing was limited.

For other information about the central bank's digital currency, as well as some design and management decisions that should be considered when establishing and operating it, please refer to nChain's CBDC.