xharaken / central_bank_stablecoin

Central Bank Stablecoin

What is Central Bank Stablecoin?

The idea of Central Bank Stablecoin (CBS) is very simple. The central bank deploys a smart contract on a public blockchain and issues a stablecoin as an ERC20 token. Specifically, the central bank exchanges X CBS coins with X USD (or their fiat currency). When a user deposits X USD to the central bank, the central bank issues X CBS coins to the user. When a user redeems X CBS coins to the central bank, the central bank returns X USD to the user. 1 CBS coin is equivalent to 1 USD because CBS is just a tokenized version of USD.

Historically, the central bank has issued their fiat currency on bank bills and metal coins. Isn't it the time to issue their fiat currency on a smart contract?

CBS will bring the following benefits:

• CBS will become a truly trustworthy stablecoin on public blockchains because it is issued by the central bank of an advanced country. CBS will enable blockchain transactions that are not yet happening with existing stablecoins issued by private sectors and thus expand the blockchain economy.
• The authorities are worried that stablecoins issued by private sectors are repeating crashes and increasing instability of the financial market. If CBS becomes a key currency of the blockchain economy, the impact of stablecoins issued by private sectors will diminish and it will help stabilize the financial market.
• The central bank that issues CBS can obtain seigniorage. Their fiat currency can increase international competitiveness by becoming a key currency of the blockchain economy.

For more details, see this whitepaper (English / Japanese). The reference implementation of the smart contract is available here.

If you have any questions, please reach out to xharaken [at] gmail.com.