Project Rosalind: building API prototypes for retail CBDC ecosystem innovation
Project Rosalind is an experiment exploring application programming interfaces (APIs) for retail central bank digital currency (CBDC). The project is based on a two-tier model representing a public private partnership. At the centre of this architecture is an API layer, which connects public and private infrastructures. The API layer offers a set of standardised functionalities to enable different systems to interoperate. The project explored how central banks could address the need for a universal and extensible API layer for retail CBDC payments. Collaborating with the private sector, the project also explored what the building blocks of a CBDC ecosystem would be and how the APIs could support innovation.
The project developed a prototype API layer, with 33 API endpoints in six functional categories. The design and functionalities of the APIs were tested and validated through more than 30 use cases identified and explored by public and private sector collaborators.
The API could work with different central bank ledger designs to facilitate payments. The project found that the design of the API layer must be consistent with, and implement the requirements of, the wider privacy model for a CBDC. APIs can support offline payments in CBDC but there are a range of challenges involved in delivering offline functionality.
The project also highlighted several areas for further exploration, including how the API might allow the ecosystem to share user and payments data in a privacy-preserving way, the trade-off between extensibility and consistency and the need to define the operational roles and responsibilities of all participants in the ecosystem.