as such Directed by the President of the United States, Joe Bidenthe Office of Science and Technology Policy (OSTP) presented a report analyzing design options for 18 Central Bank Digital Currency (CBDC) Regulations for potential implementation in the United States.
Technology Analytics Among the 18 design options for central bank digital currencies were identified across six broad categories – participants, governance, security, transactions, data, and mods. OSTP anticipates technical complications and practical limitations when trying to build a system without permission governed by a central bank, adding:
“It is possible that the technology underlying the unauthorized approach could improve significantly over time, which could make it more suitable for use in the CBDC system.”
However, the analysis assumes that there is a central authority and an authorized CBDC system.
The OSTP report helped policy makers decide on the ideal US CBDC system, highlighting the implications of including third parties in the two design options under the “participant” category – transport layer and interoperability. In terms of governance, the report evaluated various factors related to permission, ordering of access categories, identity privacy and treatment.
Other important factors OSTP wants policy makers to consider include encryption, secure hardware (for security), signatures, transaction privacy, offline transactions, programmability of transactions (for transactions), data model, ledger history (for data), exchangeability, retention limits, modifications to transactions and balances (for transactions) .
A technical evaluation of the CBDC system in the US highlighted the report’s tendency towards a hardware-protected system outside the ledger. Upon launching the US central bank’s digital currency, the report will eventually highlight the various trade-offs that policymakers decided to make when finalizing the design choices.
On September 8, OSTP . recommended Monitoring and regulation during environmental impact assessment and energy impact of crypto assets in the United States.
A related OSTP report highlights that crypto assets use approximately 50 billion kilowatt-hours of energy annually in the US, which is 38% of the global total, adding:
“Note that direct comparisons are complex, like Visa, MasterCard, and American Express combined […] It consumed less than 1% of the electricity used by Bitcoin and Ethereum in the same year, despite processing several times as many on-chain transactions and supporting the company’s broader operations.”
The report also pointed to a rise in energy consumption Proof of Work (PoW) Crypto asset storage.