B: B0007, B0008, B0009, B0010, B0011, B0012, B0013, B0014, B0015, B0018, B0019, B0028, B0029, B0030, B0031, B0033, B0034, B0035, B0038, B0041, B0043, B0045, B0046, B0047, B0048, B0049, B0054

P: P0003, P0023, P0025, P0026, P0027

R: R0011

D: D0012, D0012, D0015, D0016, D0017

1. Digital Cash:

a. By definition offer, be liquid

b. Depending on the implementation, be more convenient than physical cash

c. Offer more safety than physical cash

2. Digital Accounts:

a. Depending on the implementation, be more convenient than physical cash

b. Offer more safety than physical cash

c. Be less liquid than physical cash

1. Digital Cash: Since Digital Cash is new, there would be a need for more platforms that can handle Digital Cash. These platforms could be created by existing intermediaries or from new startups

2. Digital Accounts: Since Digital Accounts are similar to existing intermediary accounts, the ability of entrepreneurs to create new financial products is limited.

1. Digital Cash: would be more efficient and safer than using Physical Cash when sending more cross-border

2. Digital Accounts: would be more efficient and safer than using Physical Cash, BUT would require the receiver of the CBDC to have an account to receive the money. In essence, this means the people, not residents in the US and perhaps not US citizens have access to US accounts.

Access to the financial systems implies Access to the Internet. Note: This is beyond the scope of CBDC.

Figure 3: Network Availability in the US

1. Digital Cash: would have all the same limitations as physical money as far as providing access to the financial system, however, the financial systems could provide gateways to-and-from a Digital Cash system allowing financial services to the underserved without having a physical presence.

2. Digital Accounts: if people do not currently have access to existing intermediaries, the CBDC accounts would probably not improve that situation. For example, Know Your Customer.

1. Digital Cash:

a. Faster - Physical Cash is immediate

b. Cheaper - Physical Cash costs nothing to use

c. More Convenient - The use of cash is very convenient during a transaction and when the amount of cash is small. However, it is often inconvenient to obtain physical cash or to dispose of physical cash.

d. More Accessible - Physical Cash is generally easy within the US to obtain within the US. However, see the Figure 3.

2. Digital Accounts:

a. Faster - Digital Cash will have delays that need to be as fast as current account-based systems such as savings, checking, investment, direct pay, credit, debit cards, etc., and is dependent on electricity and network connectivity, see Figure 3.

b. Cheaper - The main cost in Digital Accounts is most likely the cost of achieving consensus.

c. More Convenient - Digital Accounts must be as convenient to use as current account-based systems such as savings, checking, investment, direct pay, credit, debit cards, etc. Digital Accounts would be more convenient for large physical cash transactions. Depending on the implementation of the CBDC, Digital Cash and Digital Accounts may offer the same convenience.

d. More Accessible - Unless more “financial infrastructure” is developed beyond the existing intermediary financial structures.

Payment services imply Digital Accounts, which for those people already included in the financial system, it is not a problem. With the rise of FinTech solutions, many payment services already operate 24-7-365.

However, if people are currently excluded from the Financial System, they must rely on physical cash or digital cash to pay bills. Often, in some areas within the U.S., there are no financial services nearby to make physical cash payments let alone 24-7-365! Although the private sector FinTech solutions are available when people have access to:

1. Financial accounts

2. Smart Phones

3. Networks

1. Digital Cash: There are no problems with gaining access to transferred funds since they operate very similarly to the current Physical Cash system.

2. Digital Accounts: As with most financial transactions, there is usually a need for a “settlement period”. Granted in the “blockchain” environments, these “settlement times” have been reduced from days to minutes. However, the same can be said with most FinTech solutions as well as Mobile Payment Systems such as Apple Pay or Google Pay.

FinTech is expanding and improving every day. There is also competition between FinTech vendors to compete for customers, so the costs should naturally come down. However, when intermediaries are required to complete a transaction, these intermediaries extract a price to allow the transactions. This is particularly a problem in Cross-Border transactions and the closer the transactions get to Peer-to-Peer (P2P) the less the cost.

See B0014.

The FinTech industry would say that this already exists, especially with the rise of Mobile Payment Systems such as Apple Pay or Google Pay.

The only way to offer the safest digital asset is to develop Digital Cash.

The only way to offer the safest digital asset is to develop Digital Cash.

The FinTech industry would say that this already exists, especially with the rise of Mobile Payment Systems such as Apple Pay or Google Pay.

The U.S. States like California would claim that this already exists with Electronic Benefits Transfer (EBT).

The FinTech industry would say that this is already possible, especially with the rise of Mobile Payment Systems such as Apple Pay or Google Pay.

The only way to offer the safest digital asset is to develop Digital Cash.

The U.S. Government already has programs available to help level the playing field. The Federal Reserve and the U.S. CBDC need to use the programs to help with Research Development Test & Evaluation (RDT&E) Funding.

Additional ways to help level the U.S. CBDC playing field:

Also see: Appendix C: Other Transaction Authority (OTA)

See: B0033 above.

See: B0033 above.

See: B0033 above.

Mobile Payment Systems already in many countries around the world. The barrier does not seem to the technology or the desire on the part of the FinTech industry but the Geopolitical.

Apple Pay participating banks in Africa, Europe, and the Middle East. Apple Pay works with many of the major credit and debit cards from the top banks. Just add your supported cards and continue to get all the rewards, benefits, and security of your cards.https://support.apple.com/en-us/HT206637

Google Pay users in the U.S. will be able to send money to Google Pay users in India and Singapore, thanks to a new integration with Western Union and Wise. By the end of the year, we expect that U.S. Google Pay users will be able to send money to people in more than 200 countries and territories through Western Union and to more than 80 countries through Wise. https://blog.google/products/google-pay/send-money-loved-ones-abroad/

The financial industry is already happening through the use of low-cost Financial Technology (Fintech) solutions rather than trying to extend the traditional financial products and services to the financially under-served. For example, the financial industry is now using FinTech to offer cashless Digital Transactions, the advent of low-fee Robo-Advisors, and the rise of Crowdfunding and Peer-to-Peer Lending (P2P Lending) .

Sales taxes are already collected by the merchant at the point of sale.

The Internal Revenue Service (IRS) uses third-party payment processors for payments by debit and credit card. It's safe and secure; your information is used solely to process your payment. ⁷⁾

1. You can pay online or over the phone (see Payment Processor Contact Information below for phone payments)

2. You can pay using digital wallets such as PayPal and Click to Pay

3. There’s a maximum number of card payments allowed based on your tax type and payment type

4. Employers’ federal tax deposits cannot be paid by card; see how to pay employment taxes

5. For card payments of $100,000 or more special requirements may apply

Each state and local jurisdiction has different rules.

The U.S. States like California would claim that this already exists with Electronic Benefits Transfer (EBT). This could be expanded to a national level but would require Laws and Regulations to change.

According to the IRS⁸⁾:

The best and fastest way to get your tax refund is to have it electronically deposited for free into your financial account. The IRS program is called direct deposit. You can use it to deposit your refund into one, two, or even three accounts.

Eight out of 10 taxpayers get their refunds by using Direct Deposit. It is simple, safe, and secure. This is the same electronic transfer system used to deposit nearly 98 percent of all Social Security and Veterans Affairs benefits into millions of accounts.

FinTech solutions as well as Mobile Payment Systems such as Apple Pay or Google Pay have already brought the cost of a transaction down.

FinTech solutions as well as Mobile Payment Systems such as Apple Pay or Google Pay already supports customers maintaining a positive balance.

FinTech solutions as well as Mobile Payment Systems such as Apple Pay or Google Pay have already brought credit to customers.

The only way to offer the safest digital asset is to develop Digital Cash.

See section answer for Question: 13. How could a CBDC be designed to foster operational and cyber resiliency? What operational or cyber risks might be unavoidable?

The FinTech industry would say that this already exists, especially with the rise of Mobile Payment Systems such as Apple Pay or Google Pay.

This is a place for International Standards to be created.

There are lots of “common standards” that can apply to Blockchains. See within each of these sections for a list of applicable standards:

1. DIDO RA - Technical Standard Bodies

2. DIDO RA - de facto Standards Bodies

Unfortunately, within the “blockchain” world, there is confusion about what constitutes a standard. Often, if something is Open Source, it is considered a standard. However, often these projects lack the rigor needed to be considered a “standard”. Also, see the discussion in the DIDO RA on Talk Openly Develop Openly (TODO) and look at the DIDO RA definition of a Standards Developing Organization (SDO).

Many systems are now using Two-Factor Authentication (2FA) requiring Biometrics (i.e., facial recognition, fingerprints, etc) or One-Time PIN (OTP). These 2FA methods generally require the user to be physically present to successfully log in or to have access to a mobile device like a phone or tablet.

Also see OMG DIDO-RA section on Authenticity.

CBDC Transactions need to compete with the current Currency Model used by the financially excluded, which is primarily cash partly because it is “real-time”. You see something, you want to buy it, you have the cash, and you complete the transaction then and there.

Obviously, cash is the ultimate risk-free asset readily available to the public at large. However, cash does have its risks too. For example: although cash is tangible and can be held in your hand, cash can be stolen or kickbacks required without a trace, which increases risks for people who use cash.

This research identifies three key factors that drive cash reliance in general. In factors in order of the importance is ⁹⁾:

1. Avoiding overspending: For most people with a reliance on cash, avoiding overspending and living within their means was the main reason for relying on cash. Respondents felt that using cash stops them from spending more than they have, helps them to keep track of spending, and puts enough friction into the payments process to allow them to evaluate whether they want to go through with the purchase. The physical nature of cash was also helpful in making budgeting decisions easier, particularly among those with a low cognitive ability for budgeting.

2. Ingrained habit: In all human behavior, there is a default option. For those in this research, when budgeting, using cash is often the default option. Using a different approach to budgeting would be cognitively effortful for many, and for those with low financial capabilities, very challenging.

3. Distrust of alternatives: Many respondents have concerns about fraud, personal error, and privacy when considering using alternatives to cash such as credit or debit cards. Concern about fraud and personal error is often a function of low digital capacity.

This is largely supported by the FCA’s Financial Lives survey, which outlines that:

a. just over half (55%) of adults who rely on cash to a great or very great extent do so for reasons of convenience (e.g. because cash is more convenient (35%) or it is part of their daily routine (36%)).

b. Under half (45%) rely on cash for budgeting reasons (e.g. to help them budget (33%)

The Better than Cash Alliance held an event and as part of the program, they held a moderated an Oxford-style mock debate entitled “Is Cash the Enemy of Financial Inclusion?” which was a thought-provoking approach to discussing the pros and cons of cash in financial inclusion. Table 2 is a summary of that debate.¹⁰⁾

See P0027

See section 4.4 National Privacy Considerations/

See answer to Question: 18. Should a CBDC have “offline” capabilities? If so, how might that be achieved?;

See answer to Question: 18. Should a CBDC have “offline” capabilities? If so, how might that be achieved?;

See answer to Question: 18. Should a CBDC have “offline” capabilities? If so, how might that be achieved?;