About banks and central banks

Central banks will launch CDBC - Central Bank Digital Currency - imminently.

Banks have a unique opportunity to remain the first point of contact with their clients. Rather than showing a balance in their bank apps, banks could mint digital fiat coins themselves - GS-USD, DB-EUR or CreditSuisse-CHF.

This would enable not only clients within the bank to exchange fiat value - rather than shifting bank account balances - it would also enable for clients to make digital payments with instant final settlement between banks. All that would require is establishing an "exchange rate" between fiat coins of partner banks - e.g. an exchange rate between DB-EUR and BNPP-EUR - probably 1:1 - or between GS-USD and DB-EUR if these banks want to enable cross currency payments.

Each bank is free to use their own technology to mint digital fiat coins. Most will prefer to avoid the lightning network, available as public infrastructure, as payment rails. Some may consider all technologies.

Concretely, a bank could easily leverage the Cashu protocol or the RBG protocol to mint stablecoin tokens. This would enable quasi free quasi instant final settlement of bank balance sheet backed stablecoins. As described above - banks can make tokens of other banks compatible by defining an exchange rate and agreeing on a balance in the partner bank stablecoin token. Ultimately, banks could even establish an exchange rate between their stablecoin token and the btc value - and in doing so, enable their clients to make payments on the globally available quasi free quasi instant final settlement payments network, currently supported by more than 17,000 nodes and multiple custodial wallets.