Sovereign Wallet (SWN Global) has made waves in the world of Central Bank Digital Currencies (CBDC) with its groundbreaking “Chained Cash” technology.
This innovative approach is reshaping the landscape of offline CBDC payments, offering a secure and convenient solution that eliminates the need for users to switch between online and offline CBDC.
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Sovereign Wallet: A Key Player in Project Polaris
Sovereign Wallet (SWN Global) stands out as one of the 12 CBDC technology vendors actively participating in the Bank for International Settlements’ (BIS) “Project Polaris: A High-Level Design Guide for Offline Payments with CBDC.”
This project (Project Polaris) brings together major central banks, including:
- The Bank of Finland
- Bank of Israel
- Central Bank of Iceland
- European Central Bank
- Norges Bank
- Sveriges Riksbank, and
- BIS Innovation Hub Nordic Centre.
Tech giants like Google and IBM are also contributing their expertise to this ambitious endeavor.
Project Polaris: Exploring Secure CBDC Systems
Project Polaris, a series of four installments by the BIS Innovation Hub, aims to explore secure and resilient CBDC systems, both in offline and online contexts.
The ultimate objective of this project is to provide a comprehensive guide for the design of CBDC systems, with a specific focus on the trade-offs involved in various design choices for offline CBDC.
Offline CBDC: The Ultimate Frontier
Offline CBDC implementation has long been recognized as the ultimate frontier in CBDC design.
It’s common knowledge that consensus protocols used in typical blockchains rely on network connectivity to function.
This limitation renders blockchain technology unsuitable for designing cash-like, offline CBDC systems.
In a notable departure, no cryptocurrency companies were involved in Project Polaris, underlining the unique challenges posed by offline payments.
Why Offline Payments Matter?
Offline payments are a cornerstone of central banks’ decision to opt for payment-based CBDC over smart contract-based CBDC.
While online CBDC systems are well-established, offline payments offer resilience in scenarios where network connectivity may be compromised.
They are essential for creating a CBDC that can function seamlessly in a wide range of situations.
Sovereign Wallet’s Chained Cash Technology
Sovereign Wallet made a significant impact during Project Polaris with its innovative “Chained Cash” technology.
This technology enables tokenized payments to function smoothly in both online and offline environments.
One of the most noteworthy advantages of this approach is the convenience it offers to users, as there’s no need to convert offline CBDC to online CBDC and vice versa.
Phantom Seokgu Yun’s Perspective
Phantom Seokgu Yun, the CEO of SWN Global, is a strong advocate for the preeminence of “Chained Cash” in CBDC design.
He emphasizes how this approach eliminates the confusion for users who would otherwise need to navigate between online and offline CBDC.
Additionally, it offers a more secure and cost-effective solution for central banks, as it removes the necessity to maintain two separate CBDC systems while ensuring seamless interoperability.
This not only reduces costs but also enhances the security of the CBDC system.
Chained Cash in Practice
Chained Cash technology functions as a bridge between the online and offline CBDC worlds. When a user initiates a payment, the Chained Cash system automatically selects the appropriate mode, whether online or offline, depending on the user’s connectivity.
This seamless transition ensures a user-friendly experience and minimizes disruptions in CBDC transactions.
Reducing Costs and Enhancing Security
One of the significant benefits of Sovereign Wallet’s Chained Cash technology is its potential to reduce costs for central banks.
Without the need for two separate systems, maintenance and operational expenses are notably decreased.
Additionally, the enhanced security measures built into Chained Cash technology safeguard the CBDC ecosystem from potential threats.
Interoperability: The Key to Success
Interoperability is a critical factor in the success of any CBDC system. Sovereign Wallet’s Chained Cash technology prioritizes this aspect, ensuring that CBDCs from different central banks can seamlessly interact.
This fosters a collaborative environment where cross-border transactions and international trade can flourish.
Bottom Line
Sovereign Wallet’s “Chained Cash” technology is a game-changer in the realm of CBDCs. By addressing the challenges of offline payments and emphasizing convenience, security, and cost-efficiency, it has carved a path towards the future of digital currencies.
With the collaboration of major central banks and tech giants, this innovation paves the way for a more interconnected and robust CBDC ecosystem, benefiting both users and central banks alike.
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