Application of Blockchain in the Development of Central Bank Digital Currencies

Abstract

With the increasing interest in digital currencies, the role of blockchain in shaping the future of finance has become crucial. This paper examines the application of blockchain technology in Central Bank Digital Currencies (CBDCs), exploring its potential to enhance financial systems through improved security, transparency, and efficiency. This research proposes a blockchain-based architecture for CBDC deployment, highlighting the algorithms and tools used. The findings show that CBDC can address key issues in financial infrastructure, such as reducing transaction costs, enhancing security, and promoting financial inclusion. This paper offers practical insights for central banks considering blockchain for digital currency initiatives.