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Almost all Cryptocurrencies implemented so far use the concept of tokens, accounts, wallets, transactions, and distributed ledgers. In essence, these approaches use a model of the way money is handled in bank accounts¹⁾. Underlying these Cryptocurrencies is the concept of Coins. As a general rule, the Coin's value fluctuates and can be quite volatile:

• As with most commodities, assets, investments, or other products, cryptocurrency's price depends heavily on supply and demand
• As an asset, it can be adopted quickly by investors, traders, and speculators and is often based on emotion rather than underlying value. This contributes to price movements and plays a critical part in a cryptocurrency's value at any given moment. In other words, the cryptocurrency value is fickle
• Contributing to the cryptocurrency value are opinions put forth by media outlets, influencers, opinionated industry moguls, and well-known cryptocurrency fans fueling investor demands and concerns, further contributing to price fluctuations

Typically, these coins' values can be defined by the Gartner Group's Hype curve (See OMG's DIDO-RA problem statement).

Figure 1: Gartner Group Hype Cycle

For many cryptocurrencies, the hype curve is not considered much of an issue since the life expectancy for cryptocurrencies is in the order of decades at best, while the life expectancy of CBDC needs to be much, much longer.

Obviously, the Federal Reserve does not want CBDC to follow the hype cycle. That is why it is important for the Federal Reserve to move slowly and with a well-thought-out plan for CBDC.

One method proposed to avoid this volatility is the use of Stablecoins instead of traditional cryptocurrencies like Bitcoin, Ethereum, Ripple, etc. (See the OMG DIDO-RA discussion on Consensus Platforms for a more detailed list).

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Note: The following Digital Account Theoretical User Scenario is only provided for discussion purposes. Actual User Scenarios would be developed during systems analysis and modeled using a Model-Based Systems Engineering (MBSE) approach and address the problem is far more detail with a team of experts.

In the following example, the CBDC is modeled as a Digital account, each account representing an End User. The End Users would actually “own” a wallet that contains account information where money is recorded as a balance that can be added to or subtracted from. For example, a retail purchase would deduct the amount of the purchase from the customer End User's account and add it to the Store's account.

Figure 2 represents a stylized use of a Digital Account flow.

Figure 2: Simplified Digital Account Flow

• Table 1 represents the initial contents of a Digital Account Wallet of an End User. Each Digital Account Certificate in the wallet, such as the \$1,489.72 balance, is signed by the owner of the Digital Account Wallet.
• Table 2 represents the initial contents of at Digital Account Till at a store. Each Digital Account Certificate, such as the \$1,910.00 balance, is signed by the store that owns the Digital Account Till.

In this example, the End User's Digital Account Wallet is used to purchase an item in a store that lists for \$488.78.

Table 3 provides a possible withdrawal from the End User's Digital Account Wallet. If the withdrawal is accepted by the Digital Account Wallet's owner, the Digital Account certificates ownership is changed to the stores.

Note: there are many ways the \$488.78 could have been achieved using the Digital Account Wallet provided in Table 1. This is one way. In an actual implementation, the contents of the composition of cash could be modified by the End User as long as it summed to \$488.78, just as would occur in a real wallet.

• Table 4 represents the contents of the Digital Account Wallet of the End User after the transaction.
• Table 5 represents the contents of the Digital Account Till of the store after the transaction.

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There are three categories of “desirements” alluded to in the White Paper and identified within the Object Management Group White Paper Analysis:

• Digital Cash Model - these are “desirements” with CBDC characteristics most closely aligned with the simple coin cash model
• Digital Account Model - these are “desirements” with CBDC characteristics most closely aligned with the Digital Account Model (i.e, savings, checking, investment, direct pay, credit, debit cards, etc. )
• Research Areas - these are “desirements” with CBDC characteristics most closely aligned with “research” models such as Stablecoins

In this discussion, only the “desirements” identified during the White Paper Analysis are considered. Table 6 represents the allocation of “desirements” germane to the Digital Account Model.

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Table 7 provides a summary of using a Digital Account Model instead of a Digital Cash or Stablecoin Models. Many of the OMG identified “desirements” found in the Money, and Payments: The U.S. Dollar in the Age of Digital Transformation White Paper during the White Paper Analysis appear to be appropriate for a CBDC “Account Model”. The “Account Model” uses Digital Money in an analogous model as Accounts for CBDC. For example, the “desirements” B0005, which is a requirement to “Protect against criminal activity| In this context, criminal activity is either Money Laundering or Fraud. Fraud is an intentionally deceptive action designed to provide the perpetrator with an unlawful gain or to deny a right to a victim. Types of fraud include tax fraud, credit card fraud, wire fraud, securities fraud, and bankruptcy fraud. Fraudulent activity can be carried out by one individual, multiple individuals, or a business firm as a whole”, is easily associated with Accounts.