Barclays addresses potential CBDC fragmentation in new paper

finextra.com:

Written by two members of the Barclays Chief Technology Office, managing director, Lee Braine, and enterprise architect in advanced technologies, Shreepad Shukla, the paper explores how ecosystems can provide a “common programmability layer” that interfaces with account systems at both commercial banks and the central bank.

By adopting and extending the Bank of England’s ‘platform model’ for a potential UK CBDC, it considers how a central bank core ledger, an interface to that ledger, and authorised Payment Interface Providers which allow users access to CBDC, would function in this proposed architecture. On the paper’s release, Braine stated: “there is a risk of fragmentation in payments markets and retail deposits unless existing forms of money and new forms of money such as central bank digital currencies are interoperable and have similar operational characteristics.” “This fragmentation risk can be mitigated by placing the different forms of money on a similar footing and so we explored on how industry ecosystems could provide a common programmability layer that acts as an overlay service interfacing with the account systems at both commercial banks and the central bank. There could potentially be multiple ecosystems providing competing services using different platforms and technologies, but using common policies and standards.” Braine is a member of the Bank of England and HM Treasury’s CBDC Technology Forum, and his paper notes that we can expect both bodies to launch a consultation to set out their assessment the case for a UK CBDC, during 2022. Fragmentation risk was recently raised by respondents to the Bank of England’s discussion paper on new forms of digital money, who noted that interoperability would