Project Sela: an accessible and secure retail CBDC ecosystem

Central bank money forms the core of the global monetary system, providing a foundation of safety, neutrality, accessibility and integrity underpinned by the payment finality achieved via settlement on the central bank's balance sheet. Currently, the public has access to only one form of central bank money – physical cash in the form of notes and coins. However, there is clear evidence of a decline in the use of physical means of payment as consumers shift to digital payments that are heavily reliant on private providers. As economies become increasingly digital, more and more central banks are exploring retail central bank digital currency, or rCBDC, and evaluating different designs. 

Designing a functional rCBDC platform presents several challenges for central banks. The central bank can play a critical role in operating the core of the system and ensuring sound money, liquidity and overall security. As retail payment needs are diverse and constantly evolving, one way to meet this demand is through a vibrant community of intermediaries that can foster competition, innovation and access. In their explorations, central banks are therefore contemplating many alternative designs for an rCBDC system. 

The questions that must be considered in these efforts include, notably, what is the most efficient division of tasks between the private and public sectors in the provision of the rCBDC platform and services? How can an rCBDC system promote access and competition, and foster innovation in payment services? Does increased access come at the cost of greater cyber security risks? And, lastly, can a well designed rCBDC system retain the desirable attributes of cash while also creating user experiences functioning as well as, or better than, today's payment systems? These are questions that Project Sela seeks to answer. 

Sela tests the feasibility of an accessible and cybersecure rCBDC proof of concept. In doing so, it assumes that competition, innovation, access and cyber security are desirable properties of an rCBDC payments platform, and that these properties can be achieved through a public-private partnership that supports a vibrant ecosystem of private sector intermediaries. For this purpose, an rCBDC architecture was chosen where the central bank operates the retail ledger and provides rCBDC accounts for end users, while private intermediaries handle all customer-facing rCBDC services and obligations.