With its life as a digital currency, the CBDC will be exposed to threat-entities trying to steal or replicate it. It will need added security to function the way it’s meant to.
The first cryptocurrency was launched with the objective of floating an alternate private currency with a store of value that would serve as a hedge against inflation and shore people during recessions. Over a decade since, it is now clear that the former probably won’t happen and the latter hasn’t been proven.
Nevertheless, Bitcoin has scaled astonishing heights in successive swings and has gained the trust of leading business houses. Much popularity as it has gained on the surface, the cryptocurrency has found greater mobility in the Dark Web.
Security and anonymity are the two features of the underlying blockchain technology that the entities of the darknets bank on to safely conduct their illicit trades. In the dealings of illicit drugs, arms, child porn, human trafficking, and assassins and hitmen, crypto provides for a perfect shield of undetectable transactions.
Regulating the Dark Web
With the ever-rising numbers of crimes, cybersecurity sought out ways to bust the rackets and close down the dark markets but to date have met with negligible success.
As a means of regulating the illegitimate trades rampant in the Dark Web, it was suggested that cryptocurrencies should have a sovereign backing. Sovereign-backed crypto would come under the scanner every time it moved and tracing the movements would lead the authority to the criminals of the darknets to bust their chain.
But this would strip the crypto of its beauty of decentralization that is inherent in Blockchain. The backing of some currency would only centralize its operation putting control back in the hands of the central financial governing body. Hence, not only does crypto lose its charm of decentralization but also the convenience of it not being a legal tender. In other words, the crypto no longer remains regulation-free.
Enter the CBDC
Although the Central Bank Digital Currency (CBDC) has nothing to do with curbing the mal-entities of the Dark Web, it is, in essence, crypto with sovereign-backing.
Governments of leading nations had to come to terms with the fact that crypto has already become a potential financial asset. Prohibiting its run would only weigh heavily on the economy, whereas legalizing its trade would earn huge revenue. This heavy earning could, by the way, open the gates for evils like money laundering and terror financing.
Faced with such challenges and more, as are native to a particular region led to the conceptualization of the CBDC.
CBDC is “a digital form of central bank money that is different from balances in traditional reserve or settlement accounts”.
This new form of money is increasingly gaining interest and central banks are neck-deep in research and experiments with the underlying technology.
A CBDC is a virtual payment instrument, denominated in the national unit of account, that is a direct liability of the central bank. Being of virtual nature, the CBDC would certainly require robust security features, since anything that has online exposure is at risk of being stolen on may be duplicated, as in this case.
Decentralized Ledger Technology or Blockchain is the technology that powers the CBDC. HashCash, a globally acclaimed blockchain pioneer organization proposes a fix to bolster the security parameters of CBDC, natively.
The use of “permissioned” blockchain, forms the first line of security in the CBDCs. Controlled Blockchain or “permissioned” blockchain combined with the K-Y Protocol has several monetary and non-monetary uses. Harnessing its full potential should feed a wide spectrum of applications ranging from banking, taxation, and contracting to space research, automation, and public services.
Hashcash has a diverse portfolio in delivering fintech solutions and rich experience from working with top global banks, thus, making it a strong candidate to provide the technology behind the CBDC.
HashCash boasts of a concrete foundation rooted in research, development, and implementation of multiple variations of DLT and blockchain technology. Their work history has evolved with providing technology to central banks among others since 2015. They continue to parade providing thought leadership on motivation, design, and policy issues driving CDBC adoption in a collaborative and consultative approach.
HashCash is a global software company offering solutions in Blockchain, AI, Big Data, and IoT through its platforms, products & services. HashCash Blockchain products enable enterprises to move assets across borders in real-time for Remittances, Trade Finance, Payment Processing, and more. HashCash runs a US-based digital asset exchange, PayBito & Digital asset payment processor, BillBitcoins. HashCash offers exchange solutions, Payment processor software, ICO services, and customized Blockchain use case development. It propels advancement in technology through Blockchain1o1 programs and its investment arm, Satoshi Angels. HashCash solves the toughest challenges by executing innovative digital transformation strategies for clients around the world.