Digital Public Money Infrastructure
How can public money fit in the modern digital economy?
The Digital Public Money Infrastructure project aims to find answers to the many aspects of this challenge through interdisciplinary, cross-professional perspectives that bring together experts and practitioners from law, technology, finance, and policy.
The way money moves is changing faster than ever before. From contactless payments to central digital bank currencies, we are entering a time where the foundations of our financial systems are being rewritten. At the heart of this transformation lies a crucial question: how can we build a digital public money infrastructure that is open, fair, privacy-respecting, and serves the public good?
This research brings together academics, regulators, and industry to address how public money can fit in the modern digital economy.
Our project is committed to being transparent and public-facing, ensuring that knowledge, design, and policy ideas are accessible and collaborative. By sharing insights and practice proposals, we aim to support policymakers, researchers, and the public in shaping the future of money.
Working papers
Digital Asset Markets with Offline Digital Public Money
Eduard de Jong
As an offline, digital representation of ownership of a (digital) asset, a digital asset token (DAT) is data stored in a computer controlled by the owner. With its embedded digital signature, a DAT acts as an immutable proof of ownership. A digital trade with two digital inputs: the DAT of the seller and digital public money from the buyer; results in a new DAT for the buyer. The trade is executed as a Delivery-versus-Payment (DvP) protocol using a digital “fair exchange” engine. In this protocol, the buyer uses digital public money to make a payment, with immediate finality, directly from buyer to seller, resulting in immediate settlement of the trade. The immediate settlement in the DvP results in a trade at internet speed, without involving a broker a custodian on any other intermediary, at effective zero marginal operational costs and without liquidity and other risks.
Notes
Offline E-cash for Digital Public Money
There is a growing requirement for Digital Public Money that is managed for the public good. Private companies have demonstrated the convenience and utility of digital money, but as society becomes increasingly digital, the limitations and risks of Private Digital Money are evident. Offline E-cash, issued and managed by a central bank, is the solution.