The Federal Reserves officials have stated that CBDC will not be based on accounts for the general public and it will not rely on blockchain/DLT. There are some debates inside the Fed but it is less likely that this decision will change in the future. This will likely be the ECB decision too.
TDNSYS proposes a system based on digital tokens as a long, unique, and impossible to guess, randomly generated string of bytes.
This approach has vast implications. It is as if we were using the serial number on a Fed note instead of the note itself. Issuance and distribution would be exactly as it is for cash. The digital token can be transferred as a printed bar code or using a digital device.
Creating currency in digital form is contingent on finding a solution to the double-spending problem. This is a problem that arises when using digital tokens. For example, to reinforce single-use licensing, a software company issues a digital key (digital token) to the buyer. The problem is that the key can be used on more than one installation, in other words, it can be ‘double-spent’. To prevent double-spending a key can be generated based on hardware specific to the machine where the system is to be installed or by using a license server.
TDNSYS offers a simple, reliable, and elegant solution to the double-spending prevention problem. It is not based on blockchain, distributed ledger technology, or central bank accounts. It can easily be implemented using mature, state of the art, proven technologies used in the Financial Market Infrastructures (FMIs). . It will have little impact on the current financial system.