CrossCoin: An International CBDC System with Optimal Investments

We consider the design of an international CBDC system, where users can transact within or across jurisdictions under central bank issued CBDC units. We present CrossCoin, a pair of an economic design and a blockchain protocol that incentivizes CBDC currency service providers and allocates them CBDC transactions for validation. The CrossCoin economy determines the ideal valuation of transaction validation for service providers under the Cournot regime. The CrossCoin blockchain protocol, an amendment to Streamlet, ensures that the system remains functional even when a minority of the set of enrolled jurisdictional authorities decide to opt out of the economy under exogenous incentives.