The Importance of Where Central Bank Digital Currencies Are Custodied: Exploring the Need of a Universal Access Device

Abstract

Distributed Ledger Technology (DLT) is out to change our future. Its scope is not limited to tokenizing physical objects. In the case of Central Bank Digital Currencies (hereinafter, CBDCs), they can change the way we look at money, one of the earliest inventions of humanity. As soon as digital asset trading evolved into a market, developers started releasing digital wallets for their storage. While these attempts are the recognition of users’ needs, their technical level still leaves some space for improvements. Among CBDC related issues, the development of a secure wallet infrastructure is gaining recognition as one way to solve key problems like ensuring equal access to banking facilities. Also, it can offer a novel way to approach digital identity and other functional problems connected to digital assets. Whenever we are executing a financial transaction, its consequences are not restricted to the monetary realm: issues about fair competition, ownership, and management of our personal information come into play. An infrastructure is needed to protect and support our digital rights. Technology is ready to support the development of a secure Universal Access Device (UAD), a single key tool for protecting and representing us, and the organization for supporting it from a network. This paper aims to explore the arising legal and economic issues following the adoption of UADs.