The Vice President of the United States, Joe Biden, has given instructions to the Office of Science and Technology Policy (OSTP) to work on the design choices for the 18 CBDC systems that are going to be implemented in the country.
OSTP Has Submitted Their Reports Regarding the 18 CBDC Design Options
As the federal government of the United States continues its review of the central bank digital currency (CBDC), it is possible that a potential deployment will not be far behind.
In accordance with President Joe Biden’s directive, the Office of Science and Technology Policy (OSTP) has provided its evaluation of the 18 CBDC design templates for the United States. In addition, the evaluation of the digital asset encompassed six different categories. Existence can be proven for things like participants, governance, and security, as well as transactions, data, and adjustment. The Open Source Technology Project (OSTP) also provides recommendations regarding the difficulties and restrictions involved in constructing a permissionless system.
Nevertheless, the investigation arrives to the conclusion that CBDC is subject to centralized authority and has been granted approval.
The objective of the OSTP study was to provide decision-makers in the United States with information that would assist them in selecting the option that was most suitable for the country. In addition to this, the paper emphasized the negative aspects of incorporating third parties into both of the design options. The participant category is connected to the transport layer as well as the token’s interoperability.
In the governance section of the report, topics such as permission, identity privacy, access tiering, and remediation were discussed.
There are a number of additional considerations that the OSTP urges policymakers to take into account. Cryptography, secure hardware, digital signatures, the privacy of financial transactions, and a host of other methods are among them.
Is the CBDC in the US Ready?
The report from the OSTP is not the complete version of the recommendations. Instead, it is a proposed design choice that will be discussed by policymakers so that they can choose the option that works best. Based on the findings of the technical analysis, it would appear that the OSTP prefers to implement a hardware-secured, off-ledger CBDC system in the United States.
Additionally, at the beginning of the month, the OSTP made recommendations regarding the monitoring and regulation of the CBDC project. Additionally, the impact of digital currency on energy consumption and the environment in the United States was analyzed.
The Office of Strategic and Budgetary Planning (OSTP) found that cryptocurrency mining consumes approximately 50 billion kilowatts of energy on an annual basis in the United States. This accounts for approximately 38% of the total energy consumption made by the cryptocurrency industry worldwide.
Comparatively, the energy consumption of card payment service providers such as Visa and Mastercard is less than 1% of what Bitcoin and Ethereum were responsible for in the same year. This is the case despite the fact that it supports corporate operations and processes more on-chain transactions than the cryptocurrency networks.
Gary Gensler, the chairman of the United States Securities and Exchange Commission (SEC), has suggested that ether might be considered a security product. This is another recent development. This statement was made by Gensler a few hours after the long-awaited Merge finally came to a successful conclusion.
In his opinion, the vast majority of Proof-of-Stake (PoS) crypto assets should be categorized as securities. The head of the Securities and Exchange Commission (SEC) pointed out that “staking” Ether involves other people selling their assets in the hope of making a profit. In addition, according to the Howkey Test, transactions of this kind are classified as “securities.”
However, prior to the transition, a number of industry experts revealed that after the Merge, Ethereum would be subject to closer scrutiny from regulators.
The transition from a Proof of Work (PoW) consensus protocol to a Proof of Stake (PoS) consensus protocol will result in the shutdown of the Ethereum mining operation.
However, mining of the forked token will continue after the creation of Ethereum on PoW (ETHW), which will use the same algorithm.