A 9-dimension grid for the evaluation of central bank digital currencies

Blockchain technology offers new opportunities for the development of central bank digital currencies (CBDCs). Although discussion on the matter is still in its early stages, researchers and practitioners have proposed possible frameworks via which to explore the potential of this new form of money for central banks and governments. Since blockchain technology is very broad, central banks can conceive of many different blockchain types to sustain CBDC, and the decisions taken by a central bank at a technical level determine the economic possibilities of the resulting monetary system. In other words, the technical attributes of a blockchain have crucial implications for the monetary system that such a blockchain might sustain. In this article, we propose a grid that identifies nine fundamental technical dimensions to be assessed by central banks when establishing a digital currency system based on blockchain technology, and that analyzes the different implications for the central bank as it moves through each of the identified dimensions. Our objective is to offer this grid as a tool to aid in the structured, conceptual, and technical development of national currencies based on blockchain. By way of illustration, we use the grid to analyze three practical scenarios that significantly vary in their implications for the monetary system