CBDC Multi-Tier Architecture Overview
Wiki route
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[!info] TL;DR CBDCs (central bank digital currencies) can be classified into 3 paradigms based on issuance architecture: two-tier architecture (central bank → commercial bank → user · China e-CNY etc.), direct CBDC (central bank directly to user · theoretical only), and token-based multi-tier architecture (layered central bank + commercial bank tokenised deposits · Brazil DREX / digital euro etc.). The choice of architecture reflects fundamental judgements by central banks on financial intermediation continuity / monetary sovereignty / privacy / cross-border interoperability.
Key facts
- As of end-2025, 130+ central banks globally are researching CBDC; 30+ have entered the pilot stage •
- Only 4 countries have formally issued retail CBDCs (China / Brazil / Nigeria / Jamaica) •
- All G10 central banks have chosen two-tier or multi-tier architecture; none has adopted direct CBDC •
- Brazil’s DREX is the most mature commercial experiment in the token-based multi-tier paradigm •
- China’s e-CNY is the largest-scale proof-of-concept for two-tier architecture (cumulative ¥7tn yuan as of 2025) •
- Digital euro holding cap: €3000-4000 (to avoid bank deposit outflows) •
Mechanism / How it works
The core difference among the 3 types of architecture lies in the account hierarchy:
| Dimension | Two-tier | Direct | Token-based multi-tier |
|---|---|---|---|
| Number of central bank accounts | Few (for commercial banks) | Many (for all citizens) | Medium (for commercial banks + token pools) |
| Role of commercial banks | Complete (KYC + distribution) | Marginalised or eliminated | Evolves into tokenised deposit issuers |
| Privacy | Commercial banks can see; central bank restricted | Central bank has full visibility | Adjustable via cryptographic layer |
| Technology | Account-centric | Account or token | Token + smart contracts |
| Cross-border | Weak | Extremely weak | Strong (interoperable with wholesale CBDC) |
Political implications of architecture choice: Direct CBDC marginalises commercial banks → breakdown of financial intermediation → central bank takes on credit allocation → politically unacceptable. All major central banks choose to protect the bank deposit base (two-tier or multi-tier). Token-based multi-tier is an emerging middle path that introduces programmability while preserving intermediation by having commercial banks issue tokenised deposits — structurally isomorphic to the logic of Institutional Stablecoin and Deposit-token Thesis.
Origin & evolution
2014 : PBoC begins e-CNY research (the oldest large-scale CBDC project globally). 2017-2019 : Multilateral organisations such as BIS / IMF propose the “central bank digital currency” conceptual framework. 2020 : ECB publishes digital euro report, establishing the “two-tier / direct” dichotomy. 2022.04 : China’s e-CNY pilot expands to 23 cities; two-tier architecture validated at scale. 2023-2024 : Brazil’s DREX (Hyperledger Besu-based) + digital euro legislation begins → token-based multi-tier paradigm matures. 2025-2026 : G10 central banks coordinate wholesale CBDC via Agorá; retail CBDC pursued independently by each country → “architecture choice determines sovereign space” becomes central bank consensus. For the Japan DC-JPY trial, see DC-JPY Overview.
Related
- Wiki Index
- Three Active Paradigms · e-CNY / DREX / Digital Euro
- Four Major Architecture-choice Tradeoffs
- BIS Project Agorá
- Five Layers of Central-bank Function Unbundling
Sources
Discovery
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