What Are the Technology Requirements for a Central Bank Digital Currency?

Bank Underground’s Simon Scorer wrote:

What type of technology would you use if you wanted to create a central bank digital currency (CBDC) i.e. a national currency denominated, electronic, liability of the central bank? It is often assumed that blockchain, or distributed ledger technology (DLT), would be required; but although this could have some benefits (as well as challenges), it may not be necessary. It could be sensible to approach this issue the same way you would any IT systems development problem – starting with an analysis of requirements, before thinking about the solution that best meets these.

The subject of CBDC also raises a number of significant economic questions, but the focus of this post is primarily on the technological considerations. For the purpose of this post, I consider a universally accessible CBDC which is widely used by individuals as well as businesses – this forces the consideration of some challenging technological features. A CBDC which is used by individuals (i.e. a retail CBDC) could also be used by financial institutions and institutional investors (i.e. wholesale), but for these requirements I will focus predominantly on the retail aspects. The requirements I outline are technology agnostic; they should enable the consideration of both centralised and DLT-based solutions to a CBDC.

The table below summarises some of the likely technology requirements for a CBDC. These are discussed in greater detail below.


Like current financial infrastructure, a widely used CBDC would likely be considered critical national infrastructure. Any unexpected downtime could have a major impact on the functioning of the financial system and on the real economy. It would need to be operational across the country, 24 hours a day, 365 days a year. This would require extraordinary levels of resilience. A minimum operational availability of 99.999% might not be unreasonable for the core settlement engine – equating to a downtime of approximately 5 minutes during a year.

Some aspects of the wider system may have lower resilience requirements, especially if users are able to switch between multiple service providers. But the central bank might still choose to set minimum standards for these providers.


Security considerations would also be paramount. As highlighted by the increasing frequency, impact and reach of cyber-attacks, a CBDC would need to be secured against attack. It would need to be designed to protect against any unauthorised access to, and alteration of, data, as well as disruption to operation (e.g. DDoS attacks).

The threats faced by a CBDC could be much greater than the threats faced by private digital currencies like Bitcoin. Potential attackers may have different motivations (including simply disrupting or undermining confidence in the system) as well as greater capabilities and resources (potentially including state-sponsored attacks).


We could estimate a top end requirement for the volume of transactions and the number of users by considering what would happen if every payment currently made via a bank account in the UK instead goes via CBDC, even if this scenario is highly unlikely.

Figures from Payments UK show around 700 electronic transactions per second. This rises to 1,200 if you also include cash and cheques. However, these figures are based on annual volumes being spread evenly throughout each day. Transactions during peak times will be significantly higher. A reasonable estimate of a peak figure may be in the region of several thousand transactions per second.


Bank Underground
Simon Scorer
September 13, 2017