<p>I think payment rails just refers to the gateway in which a provider (Fintech, Banks, Credit Cards) can offer a payment solution. By this logic, it makes sense that CBDCs depending on how it is being carried out, will increase the diversification in payment platforms.</p>
<p>Taking the example, of China's experiment with CBDCs, users can pay offline to merchants, hence serving as a contingency even if the internet/protocol breaks down.</p>
<p>Regarding efficiency gains, perhaps lowering transaction fees for merchants, thus reducing friction and middleman costs. I think in the UK, Amazon removed Visa as transaction costs are too expensive. I would think the CBDCs have close to none or no transaction fees.</p>

CC BY-SA 4.0
2021-11-21T22:31:56.750Z
Hi @Zheng Yuxiang, "**China's experiment with CBDCs, users can pay offline to merchants, hence serving as a contingency even if the internet/protocol breaks down**". it is really interesting to me. How come CBDC can be paid offline?? Is there any paper or document in English about that then?. Much thanks and appreciated
Phil Nguyen
CC BY-SA 4.0
2021-11-22T06:54:14.253Z
Hi @Louise , from what I have gathered, the offline payment works via NFC. Here are some links to the papers that describes how the CBDC work in China.

1) https://www.hashkey.com/wp-content/uploads/2020/10/HashKey-Nomura-white-paper.pdf


2) http://www.pbc.gov.cn/en/3688110/3688172/4157443/4293696/2021071614584691871.pdf
Zheng Yuxiang
CC BY-SA 4.0
2021-11-21T19:52:26.493Z
2021-11-21T19:52:26.493Z
Zheng Yuxiang
<p>I think this paper, although not from an economic prespective, may contain many references about how offline payments work
<a href="https://www.mdpi.com/2076-3417/12/9/4488" rel="nofollow noreferrer">https://www.mdpi.com/2076-3417/12/9/4488</a></p>
<p>More  economic CBDC references in general</p>
<p><a href="https://www.researchgate.net/publication/368969492_CBDC_uncertainty_Financial_market_implications" rel="nofollow noreferrer">https://www.researchgate.net/publication/368969492_CBDC_uncertainty_Financial_market_implications</a></p>
<p><a href="https://www.sciencedirect.com/science/article/pii/S027553192300096X" rel="nofollow noreferrer">https://www.sciencedirect.com/science/article/pii/S027553192300096X</a></p>
<p>(sorry if this should be a comment more than an answer, but I don't have enough points to comment yet thought it could be useful to know)</p>

CC BY-SA 4.0
2023-08-28T14:28:39.947Z
2023-08-28T14:35:30.330Z
2023-08-28T14:35:30.330Z
ShAr
<p>From reading <a href="https://www3.weforum.org/docs/WEF_CBDC_Policymaker_Toolkit.pdf" rel="nofollow noreferrer">Lannquist,2020, p.7</a>, they said</p>
<p>DLT-based CBDC <strong>&quot;could offer diversification in payment “rails”, providing efficiency gains or serving as a contingency payment medium.&quot;</strong></p>
<p><em><strong>I am wondering how DLT-based CBDC can offer the diversification in payment platform, provide efficiency gains and serve as a contingency payment medium?</strong></em> Please let me know if this question is not suitable here.</p>

<currency><cryptocurrency><cbdc>
How does Distributed Ledger Technology-based Central Bank Digital Currency provide efficiency gains and serve as a contingency payment medium?
Phil Nguyen
# How does Distributed Ledger Technology-based Central Bank Digital Currency provide efficiency gains and serve as a contingency payment medium?

(Asked by: username_0 on 2021-11-20)

From reading [Lannquist,2020, p.7](https://www3.weforum.org/docs/WEF_CBDC_Policymaker_Toolkit.pdf), they said

DLT-based CBDC **"could offer diversification in payment “rails”, providing efficiency gains or serving as a contingency payment medium."**

***I am wondering how DLT-based CBDC can offer the diversification in payment platform, provide efficiency gains and serve as a contingency payment medium?*** Please let me know if this question is not suitable here.

**Tags:** currency, cryptocurrency, cbdc

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## 2 answers

### Answer by username_1 on 2021-11-21. Score: 1 | Accepted answer

I think payment rails just refers to the gateway in which a provider (Fintech, Banks, Credit Cards) can offer a payment solution. By this logic, it makes sense that CBDCs depending on how it is being carried out, will increase the diversification in payment platforms.

Taking the example, of China's experiment with CBDCs, users can pay offline to merchants, hence serving as a contingency even if the internet/protocol breaks down.

Regarding efficiency gains, perhaps lowering transaction fees for merchants, thus reducing friction and middleman costs. I think in the UK, Amazon removed Visa as transaction costs are too expensive. I would think the CBDCs have close to none or no transaction fees.

> **Comments:**
> **username_0**: Hi @Zheng Yuxiang, "**China's experiment with CBDCs, users can pay offline to merchants, hence serving as a contingency even if the internet/protocol breaks down**". it is really interesting to me. How come CBDC can be paid offline?? Is there any paper or document in English about that then?. Much thanks and appreciated  
> **username_1**: Hi @Louise , from what I have gathered, the offline payment works via NFC. Here are some links to the papers that describes how the CBDC work in China.  1) https://www.hashkey.com/wp-content/uploads/2020/10/HashKey-Nomura-white-paper.pdf   2) http://www.pbc.gov.cn/en/3688110/3688172/4157443/4293696/2021071614584691871.pdf  

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### Answer by username_2 on 2023-08-28. Score: 0

I think this paper, although not from an economic prespective, may contain many references about how offline payments work
<https://www.mdpi.com/2076-3417/12/9/4488>

More economic CBDC references in general

<https://www.researchgate.net/publication/368969492_CBDC_uncertainty_Financial_market_implications>

<https://www.sciencedirect.com/science/article/pii/S027553192300096X>

(sorry if this should be a comment more than an answer, but I don't have enough points to comment yet thought it could be useful to know)


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