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Mr. Itai Agur, Jose Deodoro, Xavier Lavayssière, Soledad Martinez Peria, Mr. Damiano Sandri, Hervé Tourpe, and Mr. German Villegas Bauer
Whether in crypto assets or in CBDCs, design choices can make an important difference to the energy consumption of digital currencies. This paper establishes the main components and technological options that determine the energy profile of digital currencies. It draws on academic and industry estimates to compare digital currencies to each other and to existing payment systems and derives implications for the design of environmentally friendly CBDCs. For distributed ledger technologies, the key factors affecting energy consumption are the ability to control participation and the consensus algorithm. While crypto assets like Bitcoin are wasteful in terms of resources, other designs could be more energy efficient than existing payment systems.
Mr. Itai Agur, Jose Deodoro, Xavier Lavayssière, Soledad Martinez Peria, Mr. Damiano Sandri, Hervé Tourpe, and Mr. German Villegas Bauer

of the Control Level Enabled by Permissioned Relative to Permissionless Networks Implications for Potential Energy Gains Compared to Traditional Systems IV. Implications for the Environmental Aspects of CBDC CBDC Core Processing CBDC User Payment Means V. Conclusion References Annex I: Energy Consumption of the Current Payment System Estimates for the Digital Payment System Based on Credit and Debit Cards Estimates for Cash Conclusion Annex II: CBDC Initiatives at Developed Stages

Mr. Itai Agur, Jose Deodoro, Xavier Lavayssière, Soledad Martinez Peria, Mr. Damiano Sandri, Hervé Tourpe, and Mr. German Villegas Bauer

project but also any future digitalization project of a central bank. One nuance is that central banks may acquire CBDC technology as a platform provided by private vendors (as outlined by the Technology/Provider column in Annex II) and might not have control over some energy consumption parameters. However, because such technologies are still emerging, central banks may have a window of opportunity to influence their development by inducing competition among vendors on CBDC systems’ energy impact. CBDC User Payment Means In terms of user payment means, CBDCs