Retail CBDC

A central bank issues Retail CBDC, while the distribution model determines who manages customer relationships. Banks or payment providers can handle onboarding and payment services while customers retain a claim on the central bank. A direct claim therefore does not require the central bank to provide every customer service itself.

The BIS work on Retail CBDC law examines how responsibilities and liabilities would be allocated among participants. Payment providers need clear rules for customer identification, operational failures and dispute handling before a service can operate.

Retail CBDC and Wholesale CBDC differ primarily in who can hold the money and which transactions the system supports. Retail designs concern purchases and transfers by people and businesses, while wholesale systems serve eligible financial institutions. An institution may therefore assess both forms for different parts of its payment business.

Retail CBDC design determines which participants can see payment information and under which legal conditions. Offline functionality could allow payments when a network connection is unavailable, with safeguards against spending the same balance twice. These functions require specific technical and legal choices, as the BIS system design report explains.

A Retail CBDC can use a conventional database or distributed infrastructure, depending on the chosen architecture. Access through an account or digital tokens also depends on the design and applicable identification requirements. The term CBDC alone does not establish anonymity, offline availability or a requirement to use blockchain.

Retail CBDC would give customers another place to hold money alongside cash and commercial bank deposits. A movement of deposits into central bank money could affect how banks fund their lending. The Swiss National Bank identifies deposit outflows and consequences for financial stability among the issues that require assessment.

Holding limits and remuneration rules are possible design choices for managing those effects. Their use and level depend on the particular project, so one proposed limit cannot describe every Retail CBDC. Tokenized deposits remain claims on commercial banks, which distinguishes their legal issuer from a Retail CBDC.

The proposed digital euro is a European example of a Retail CBDC. The European Central Bank describes digital euro payments in shops, online and between individuals, alongside continued use of cash. Proposed features of the digital euro must be distinguished from features shared by every possible Retail CBDC.

The Swiss National Bank currently sees no clear advantages in introducing a digital franc for the general public. The Swiss Helvetia pilot instead concerns wholesale central bank money for eligible financial institutions. SIX Digital Exchange provides infrastructure in Switzerland for issuing and settling digital securities.