Project Polaris: handbook for offline payments with CBDC

A survey conducted by the BIS Innovation Hub Nordic Centre shows that 49% of central banks consider offline payments with retail CBDC to be vital, while another 49% deemed it to be advantageous.

Providing offline payments with CBDC is an important requirement for many central banks for reasons such as resilience, inclusion, privacy and cash resemblance. However, its implementation is complex and involves a number of technology, security and operational considerations that need to be planned and designed for at the earliest possible stages.

These considerations have implications for decisions related to policy, ecosystem roles and responsibilities, design, architecture, security, technology, investment, ongoing operations, change management and risk management.

The handbook provides a comprehensive overview of the key aspects of offline payments with CBDC and is intended to serve as a guide for central banks considering implementing offline payments capabilities.

The research for this handbook has found there is no one-size-fits-all solution, with each country having multiple reasons for providing offline payments with CBDC. The types and suitability of solution for offline payments will vary by country depending on local requirements.

The handbook provides some of the main reasons and usage scenarios for offline payments; a map and an explanation of the technology components based on available solutions on the market; and a set of design criteria for risk management, privacy, inclusion and resilience. It also provides a set of considerations that central banks can use to inform their planning, policy development, technology and business requirements, procurement activities and future operations.

This handbook is intended to help central banks to:

• understand the available technologies and security measures;
• understand the main threats, risks and risk management measures;
• understand the privacy issues, inclusion needs and resilience options;
• understand the design and architecture principles involved; and
• gain perspective on potential operational and change management issues.

The information contained in the handbook has been gathered from expert advisers, the survey of central banks, interviews with private-sector companies, meetings with central bank experts and other research.

The handbook may be updated again inline with developments with CBDC, cybersecurity and technology or as a result of feedback received and further work.