In addition to eco-friendly components, the IMF recommended central banks include other features in their CBDCs, such as compliance, higher resilience and offline capabilities.
An International Monetary Fund study on energy consumption has reveale the importance of design choices within the crypto ecosystem to build an environmentally friendly mainstream payment system.
In the study, titled “Digital Currencies and Energy Consumption,” the IMF examines the energy consumption of crypto assets based on their distinct design elements to evaluate the ideal mechanism for developing central bank digital currencies (CBDCs).
Estimates of energy use (in kWh) per transaction for the core processing of different payment systems. Source: IMF
Sharing the groundwork for policy discussions around the environmental impacts of digital currencies, the IMF recommends moving away from proof-of-work-based distributed ledger technology applications, adding:
We've partnered w/ @Iota, BioE, & @ClimateCHECK to develop real-time carbon footprint tracking through a #data confidence fabric!
Hear how #ProjectAlvarium accurately tracks carbon footprints w/ #DellTech Edge solutions.
🌻 https://t.co/u5CxmbMBAL@Intel #IOTA #Sustainability pic.twitter.com/52RENnEW3X
— Dell Edge & Telecom (@Dell_Edge) June 6, 2022
The initiative will bring about near-real-time tracking of carbon emissions from BioE’s sustainable energy and composting facility. Mathew Yarger, head of sustainability at the Iota Foundation, stated:
“We’re now able to track and verify data around climate change and how we’re actively trying to address it at a level that’s never been achieved before.”
