Central banks globally are progressing with their CBDC projects. A frequent requirement for retail CBDC is the provision of private sector digital wallets for consumers. The aim is to provide a secure way to obtain, hold, and spend digital currency.

Commercial banks are expected to be key players due to their anticipated role as primary CBDC distributors. They will offer direct integration to the existing financial system through deposit account conversion. This will be supported by their operational capability, large customer bases, and brand trust. This observation is borne out by countries such as China and India running CBDC pilots with digital wallet apps provided by leading commercial banks in collaboration with the central bank.

Temenos banking platform supports CBDC wallets

Temenos has now revealed how its banking platform can be used to support CBDC wallets. Specifically, how banks running the Temenos platform can integrate with CBDC platforms such as Hyperledger Besu and R3 Corda. It has now executed an additional set of use cases across secure non-custodial wallet opening from a mobile app built with Temenos Visualiser, transaction signing to fund wallets from deposit accounts integrated to the platform, management of offline payments, and synchronisation of transactions with the core ledger via the Temenos fulfilment service layer.

Several key use cases, including how it could securely create a new wallet, generating a private key within the Temenos Visualiser app runtime and using the phone’s secure enclave to generate a cryptographic key with which to encrypt it. This key remained shielded and inaccessible outside the enclave, ensuring it was safeguarded against external threats. Only non-sensitive data such as the public key and account identification details left the mobile device and were sent to the fulfilment service.

Offline payments are a key requirement for many central banks. There is much industry exploration and various technical challenges to be overcome. The BIS (Bank for International Settlements) project Polaris sets out a vision for different types of offline payment approach. In this proof-of-concept Temenos chose to evaluate one of these models. It says that it has successfully demonstrated staged offline payments. This is where one or both parties synchronise transactions with the core ledger to settle value transferred offline.

Temenos has now demonstrated how its platform can support a complete end-to-end vision of retail CBDC. This includes the simulation of issuance, distribution, and exchange of CBDCs between central banks and commercial banks, and now also consumers’ digital wallets.

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