Sweden’s Crunchfish has partnered with Tata Consultancy Services (TCS) to integrate its offline solution for central bank digital currency (CBDC). The listed firm previously made the finals of the G20 TechSprint for CBDC in 2022. Meanwhile, TCS has numerous high profile banking partners, including three of the top four U.S. banks and the top four UK banks. In 2022 TCS expanded its Quartz digital assets platform to launch a CBDC solution.
Offline CBDC ranked as the most popular technology feature in the latest BIS CBDC survey. More than 68% of central banks said it was a likely feature, with very similar scores amongst advanced and emerging economies. When the European Central Bank issued a call for vendors for the digital euro, the offline solution carried the highest budget of up to €662 million over four years.
Given the budget scale, Crunchfish is relatively disadvantaged because it’s a smallish company. Hence, the collaboration with TCS is a sensible strategic move. While Crunchfish is listed, its market capitalization is equivalent to $35 million. Its offline CBDC competitors include IDEMIA and Giesecke+Devrient (G+D), which have billions in revenues.
Offline CBDC patent
Crunchfish also announced it has a green light on its U.S. patent for offline digital cash. Hopefully it will only use it for defensive purposes, otherwise it could hamper other offline CBDC initiatives.
Below is the paragraph from the patent describing the key invention. It involves two smartphones or devices tapping together for the initial payment. In a later step the devices access the internet to connect to a centralized settlement service.
“A key feature of the present invention and its advantageous embodiments is the ingenious idea of splitting the digital payment process in two subsequent stages. First, there is an offline stage with local settlement between payer and payee. This involves only proximity communication between the payer communication device and the payee communication device to settle the payment transaction offline and instantly between the payer and payee at the moment of payment, with a guarantee for the payee to get paid. Then, there is a sequentially separate stage of sending locally buffered digital payment transactions, independently by one or both of the payer and payee, to the cloud for final online settlement. This inventive approach takes away any and all online issues, including connectivity problems and payment service time-outs.”
