A Novel Secure and Inclusive Central Bank Digital Currency (CBDC)

This artefact is built as part of my thesis on central bank digital currencies (CBDCs). The artefact is a decentralized app (dApp) built using:

• Hardhat (Ethereum development environment) v2.20.1
• OpenZeppelin (smart contracts) v5.0.1
• Ethers.js (web3 library) v6.11.1
• React.js (frontend library) v18.2.0

Flow of Artefact

1. User deposits fiat currency
2. Central bank generates a digital signature.
3. Equivalent CBDC tokens are minted in central bank's wallet.
4. User enters signature and smart contracts verifies it.
5. Tokens are transferred in user's wallet.

Features in Artefact

MetaMask wallet is used to confirm transactions and sign messgages.

1. We have utilized EIP-20 as our token standard. Our CBDC tokens exist as ERC20 tokens.
2. We have utlized EIP-712 as our signature signing standard.
3. We have used EIP-2612 as our signature approval standard.

Steps to build Artefact

Setup

1. Install MetaMask and VS Code.
2. Clone the repository using the following command:

git clone https://github.com/faranak-cs/cbdc.git

3. Open cbdc folder in VS Code and enter the following command in VS Code CLI to install Hardhat dependencies:

npm install

Use the same command to install React dependencies but first change directory to cbdc/frontend by using following command:

cd frontend

Now install dependencies.

npm install

Go back to parent directory cbdc using cd ..

4. Compile the smart contracts by using the following command in VS Code CLI:

npx hardhat compile

5. Write the following command in a new VS Code CLI instance. This will spin up a local Ethereum blockchain.

npx hardhat node

Keep that CLI instance running.

6. Now deploy the smart contracts on local Ethereum blockchain using the following command:

npx hardhat run .\scripts\deploy.js --network localhost

7. We need MetaMask wallet to be configured with our local Ethereum blockchain. Open MetaMask. Go to Setting > Networks > Add a network > Add a network manually. Now enter the following details and hit Save.

• Network Name:

Hardhat-localhost

• New RPC URL:

http://127.0.0.1:8545/

• Chain ID:

31337

• Currency symbol:

ETH

8. We need two Chrome browser profiles. One is for central bank's perspective and other one for users' perspective.
9. Now add three Ethereum accounts that were generated in step 5. Do this on both Chrome profiles. Open MetaMask. Go to Select an account > Add account > Import account. For Simplicity, enter the following details to add accounts and hit Import.

• Enter your private key string here:

0xdf57089febbacf7ba0bc227dafbffa9fc08a93fdc68e1e42411a14efcf23656e

Name this account as CB (Central bank).

---

0x59c6995e998f97a5a0044966f0945389dc9e86dae88c7a8412f4603b6b78690d

Name this account as P1 (Person 1)

---

0x5de4111afa1a4b94908f83103eb1f1706367c2e68ca870fc3fb9a804cdab365a

Name this account as P2 (Person 2)

---

10. All installations and configurations are done.

Run

0. Local Ethereum blockchain should be running and smart contracts should be deployed.
1. Change the directory to cbdc/frontend. Now Enter the following command:

npm run dev

2. Application should start running on http://localhost:5173/
3. Copy the url and paste it on other Chrome profile.
4. Application should be running on both Chrome profiles.

Deposit

0. Go to Chrome profile (central bank) and connect MetaMask.
1. Go to Deposit page. Enter amount and wallet address and hit Deposit.
2. MetaMask Signature Request will pop up. Sign it.
3. After successful transaction, a 65-bytes signature will be appeared. Copy it.

Mint

0. Go to Chrome profile (user) and connect MetaMask.
1. Go to Mint page and paste the signature.
2. Enter the same wallet address and amount and hit Mint.
3. MetaMask transactions will pop up. Confirm them.
4. After successful transactions, tokens will be minted.

Check balance

0. Copy the same wallet address.
1. Go to Home page. Paste the address and hit Check.
2. Available tokens will be displayed.

Artefact Package Diagram

Use Case Diagram

Artefact Demo

Demo.final.mp4

Current status of CBDCs worldwide

Source: https://cbdctracker.org/