What CBDC infrastructure startup ideas are needed?

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Central Bank Digital Currency (CBDC) infrastructure represents one of the most challenging technical endeavors in fintech, with central banks worldwide struggling to balance scalability, privacy, interoperability, and security at unprecedented scales.

While pilot programs proliferate globally, fundamental technical problems remain unsolved, creating significant opportunities for startups that can deliver practical solutions to pain points like offline payments, cross-border atomic settlement, and privacy-preserving compliance systems.

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What specific pain points are central banks and financial institutions still facing in implementing CBDC infrastructure?

Central banks consistently report six critical infrastructure challenges that current technology stacks cannot adequately address at production scale.

Scalability remains the primary bottleneck, with most distributed ledger technology prototypes failing above 5,000 transactions per second without compromising decentralization or security. Sub-second finality for retail-scale volumes (potentially 10,000+ TPS) remains technically elusive across existing blockchain architectures.

Privacy versus traceability creates an ongoing tension where central banks need full AML/KYC compliance capabilities while preserving user privacy. Current zero-knowledge proof implementations and multi-party computation solutions cannot handle the computational demands of real-time, high-volume transaction monitoring required by financial regulators.

Interoperability challenges multiply when central banks attempt cross-border CBDC frameworks. Projects like mBridge face fundamental incompatibilities between divergent consensus protocols and settlement standards, with no unified rails for atomic payment-versus-payment settlement across heterogeneous ledger systems.

Resilience and offline payment capabilities demand secure transaction processing during network outages, but current solutions struggle with both token-based and account-based models. Hardware-agnostic offline modes that maintain cryptographic security without trusted computing modules remain unsolved.

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Which areas of CBDC infrastructure are currently under active R&D and which companies or research bodies are leading those efforts?

Research and development efforts concentrate on six technical domains with distinct leadership from academic institutions, central bank innovation hubs, and private technology firms.

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What startups have recently raised funding in the CBDC space, how much did they raise, and at what stage is their technology?

Funding activity in CBDC infrastructure remains concentrated among a small number of startups, with total disclosed funding exceeding $15 million across key players as of 2025.

Emtech Solutions leads recent fundraising with a $4 million seed round in 2025, positioning their RegTech sandbox and API infrastructure for central bank adoption. Their technology has reached pilot deployment stage with six central banks globally, focusing on compliance automation and digital identity integration.

Fluency raised $1.3 million in seed funding during 2021, developing their Aureum multi-CBDC distributed ledger technology with particular emphasis on offline and programmable payment capabilities. The company has advanced to European Central Bank trial participation, testing interoperability between different CBDC implementations.

FNA secured undisclosed strategic funding in 2021, reaching Series A-equivalent status through partnerships with Giesecke + Devrient. Their CBDC impact simulation software has achieved commercial deployment with the Bank for International Settlements and other central banking partners.

LoftyInc Capital operates as a fund-level investor rather than direct startup, managing a $43 million fund focused specifically on African CBDC infrastructure development. The fund receives backing from International Finance Corporation and Proparco, targeting early-stage companies building payment rails for emerging markets.

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Which parts of the CBDC stack are still lacking robust solutions?

Six critical components of the CBDC technology stack remain inadequately addressed by current solutions, creating significant market opportunities for specialized startups.

Identity verification systems suffer from over-reliance on national electronic ID infrastructure, with no universal digital identity pipelines that can operate across jurisdictions. Current solutions cannot seamlessly integrate heterogeneous identity standards while maintaining privacy and regulatory compliance requirements.

Interoperability frameworks lack open standards for API-based integration across wholesale and retail CBDC systems. Existing solutions cannot facilitate atomic transactions between different central bank digital currencies without introducing trusted intermediaries or settlement delays.

Compliance monitoring tools remain nascent for real-time anti-money laundering consumption across multiple CBDC networks. Current AML/KYC systems cannot process the transaction volumes and cross-border complexity that production CBDC systems will generate.

Privacy preservation technologies cannot scale zero-knowledge proof implementations to handle high-volume production environments while maintaining real-time transaction processing capabilities. Computational overhead and proof generation times exceed practical deployment thresholds.

Scalability solutions consistently fail above 5,000 transactions per second without implementing sharding or layer-2 architectures that compromise decentralization principles or introduce additional security assumptions.

What infrastructure problems have proven especially hard to solve, and are there any considered unsolvable with current technology?

Three fundamental technical challenges have emerged as potentially intractable with existing cryptographic and distributed systems approaches.

Offline double-spend protection represents the most significant unsolved problem, requiring cryptographically secure offline transaction consistency without trusted hardware roots. Current solutions either require specialized secure elements (limiting device compatibility) or accept security compromises that central banks consider unacceptable for monetary systems.

Atomic cross-border settlement across heterogeneous ledger systems faces fundamental latency and legal jurisdiction barriers that may be unsolvable without central custodians. Payment-versus-payment settlement between different CBDC networks requires either trusted intermediaries (contradicting decentralization principles) or complex multi-signature schemes that introduce unacceptable settlement delays.

Full privacy with real-time auditability demands zero-knowledge proof systems that can provide complete transaction privacy while enabling immediate regulatory compliance verification. Current computational capacities cannot support the proof generation and verification requirements for production-scale transaction volumes while maintaining sub-second processing times.

These challenges have led some central banks to question whether fully decentralized CBDC architectures are feasible, potentially creating opportunities for hybrid solutions that blend centralized and distributed approaches.

What are the dominant business models in the CBDC infrastructure space, and how are these companies generating revenue?

CBDC infrastructure companies primarily operate through four revenue models, though most remain pre-commercial with limited proven monetization.

Licensing and Software-as-a-Service models dominate current approaches, with companies like Emtech and Fluency offering subscription-based access to CBDC platforms, compliance toolsets, and analytics dashboards. These models typically charge central banks annual licensing fees ranging from $100,000 to $2 million depending on deployment scale and feature complexity.

Transaction fee structures represent the most scalable long-term model, with providers charging per-transaction or per-API-call fees for live CBDC operations. However, no companies have achieved significant transaction fee revenue due to limited production deployments across the global central banking system.

Professional services revenue streams focus on custom integration, pilot program management, and regulatory advisory services. Large consultancies like Accenture and ConsenSys generate substantial revenue through multi-million dollar CBDC implementation contracts, while smaller startups provide specialized technical consulting.

Data analytics and simulation tools create additional revenue through premium access to financial network simulation capabilities and liquidity optimization modules. FNA exemplifies this approach through partnerships with central banks requiring economic impact modeling and stress testing frameworks.

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How profitable are current CBDC infrastructure startups, and what are the common paths to monetization or exits?

Profitability remains elusive across the CBDC infrastructure sector, with most startups operating in pre-commercial pilot phases funded by research and development capital rather than sustainable revenue streams.

Current financial performance shows minimal profitability among leading startups, as companies like Emtech, Fluency, and FNA continue operating primarily on pilot project funding and strategic partnerships rather than recurring commercial revenue. Most participants remain focused on technology development and regulatory approval rather than immediate monetization.

Three primary monetization pathways have emerged for successful market entry. Pilot-to-production transitions offer the most direct path, where startups demonstrate value through limited deployments and gradually expand to full-scale platform licensing with incremental fee structures. Revenue-sharing partnerships with central banks provide alternative models where companies receive percentage-based compensation tied to transaction volumes or system utilization metrics.

Exit strategies typically favor acquisition rather than independent public offerings, given the specialized nature of central banking relationships and regulatory requirements. Giesecke + Devrient's investment in FNA exemplifies the acquisition pathway, where established financial technology vendors acquire promising startups to integrate CBDC capabilities into existing product portfolios.

Strategic partnerships with major consultancies or technology providers represent additional exit opportunities, as companies like Accenture Ventures actively invest in CBDC startups to enhance their central banking service offerings.

What specific regulatory or legal hurdles are CBDC infrastructure startups encountering across different regions?

Regulatory frameworks vary significantly across major markets, creating complex compliance requirements that affect startup market entry strategies and technology architecture decisions.

• North America: Unclear federal CBDC mandate creates uncertainty around regulatory requirements, while state-level privacy laws complicate KYC data sharing protocols between federal and local authorities. Startups must navigate potential conflicts between financial privacy regulations and anti-money laundering compliance requirements.
• Europe: General Data Protection Regulation constraints significantly limit transaction data retention capabilities, forcing startups to implement complex data anonymization and deletion protocols. European Central Bank pilot governance requirements demand extensive documentation and approval processes that extend development timelines by 6-18 months.
• Asia-Pacific: Varied electronic identity acceptance standards across countries prevent standardized digital ID integration, while licensing regimes for non-bank operators create market entry barriers particularly challenging in Southeast Asian markets with fragmented regulatory frameworks.
• Africa: Regulatory sandboxes enable fintech collaborations and faster market testing, but persistent base infrastructure gaps create implementation challenges that regulatory frameworks cannot address through policy alone.

Which CBDC-related technologies are trending in 2025, and what's expected to gain traction through 2026 and into the next five years?

Technology trends in 2025 focus on privacy enhancement and scalability solutions, with significant developments expected in zero-knowledge proof implementations and sharded distributed ledger architectures.

Zero-knowledge SNARKs and STARKs are experiencing increased adoption for privacy-preserving CBDC transactions, with major pilot programs testing computational efficiency improvements that could enable production-scale deployment. Offline wallet competitions sponsored by central banks are driving innovation in secure peer-to-peer transaction protocols that maintain cryptographic integrity without network connectivity.

Multi-CBDC interoperability consortia are advancing through 2025, with projects like mBridge expanding their minimum viable product to include private sector participants and cross-border atomic settlement capabilities. These developments could establish technical standards that define CBDC interoperability for the next decade.

The 2026-2030 outlook includes four transformative technology categories. Sharded and layer-2 solutions will address fundamental scalability limitations, potentially enabling CBDC systems to handle retail transaction volumes comparable to existing payment networks. AI-led risk monitoring will embed machine learning algorithms into real-time compliance systems, automating fraud detection and regulatory reporting processes.

Programmable fiscal transfers represent longer-term opportunities, integrating CBDC systems with tax collection and benefit distribution mechanisms to enable automated government payments and social program administration. Tokenization bridges will connect CBDCs with stablecoins and tokenized assets, creating unified digital asset ecosystems that blur traditional boundaries between central bank money and private digital currencies.

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How are governments and central banks engaging with private companies or startups for CBDC deployment and testing?

Central banks increasingly utilize innovation sandboxes and academic partnerships to collaborate with private sector technology providers while maintaining regulatory oversight and monetary policy control.

Innovation hubs and regulatory sandboxes have become the primary engagement mechanism, with the Bank for International Settlements Innovation Hub's mBridge project exemplifying this approach by inviting private solution proposals for minimum viable product expansion. These programs allow startups to test CBDC technologies within controlled environments while central banks evaluate commercial solutions against their technical requirements.

Academic collaborations bridge public and private sector capabilities through institutions like MIT's Digital Currency Initiative, which partners with the Federal Reserve Bank of Boston and Bank of England on foundational CBDC research. These partnerships enable startups to access cutting-edge research while contributing practical implementation experience to academic development efforts.

Consortium models bring together multiple stakeholders through initiatives like the European Central Bank Innovation Phase, SWIFT CBDC connectivity trials, and the World Economic Forum Digital Currency Governance Consortium. These frameworks allow startups to engage with multiple central banks simultaneously while contributing to industry-wide technical standards development.

Pilot program partnerships increasingly offer revenue opportunities for startups that can demonstrate production-ready capabilities, with successful pilots often leading to expanded commercial relationships or strategic investments from government-backed venture initiatives.

What opportunities exist for startups to build middleware or complementary services on top of CBDC infrastructure being developed by central banks?

Middleware and complementary services represent the most accessible market entry points for startups, as central banks typically focus on core monetary infrastructure while outsourcing specialized capabilities.

Identity-as-a-Service platforms can provide modular digital identity verification pipelines that integrate with heterogeneous CBDC platforms without requiring central banks to build complex identity management systems internally. These solutions must handle multi-jurisdictional identity standards while maintaining privacy and regulatory compliance across different legal frameworks.

Compliance observability tools offer real-time anti-money laundering and counter-terrorism financing monitoring engines that can process CBDC transaction data at scale. Startups can develop specialized analytics platforms that automate regulatory reporting while providing central banks with actionable insights about payment system usage patterns and potential risks.

Liquidity management APIs create opportunities for intraday funding optimization modules that help financial institutions manage CBDC reserves and settlement requirements. These tools can provide automated liquidity forecasting and optimization capabilities that reduce operational costs for banks participating in CBDC networks.

User experience-focused wallet software development kits enable white-label mobile and IoT wallet frameworks with offline transaction capabilities. Startups can create consumer-facing interfaces that abstract technical complexity while providing secure, intuitive access to CBDC payment functionality for retail users and businesses.

Where are the white spaces in the CBDC ecosystem that are being ignored or underdeveloped by both public and private players?

Four significant white space opportunities remain largely unaddressed by current market participants, representing substantial potential for innovative startups.

Inter-protocol liquidity pools could enable automated market maker models for multi-CBDC foreign exchange without requiring central intermediaries. Current cross-border CBDC systems rely on traditional correspondent banking relationships, creating opportunities for decentralized liquidity provision mechanisms that reduce settlement times and foreign exchange costs.

Decentralized oracles for CBDC smart contracts represent an underdeveloped infrastructure layer that could enable programmable money applications requiring external data feeds. Central banks developing programmable CBDC capabilities need secure, reliable mechanisms for triggering automated payments based on real-world events or economic indicators.

CBDC analytics platforms focusing on advanced usage insights and macro-policy dashboards remain nascent despite central bank interest in understanding economic impacts of digital currency adoption. Sophisticated data visualization and economic modeling tools could help central banks optimize monetary policy decisions based on real-time CBDC usage patterns.

Retail-grade hardware security modules for offline payments represent a critical infrastructure gap where affordable device-based key protection solutions are essential for mass CBDC adoption. Current solutions either require expensive specialized hardware or compromise security assumptions that central banks consider unacceptable for monetary applications.

Conclusion

Sources

1. ADB - CBDC Development and Challenges
2. Brookings Institution - Design Choices for Central Bank Digital Currency
3. Cointelegraph - Private firms join mBridge MVP
4. WEF - CBDC Technology Considerations
5. Giesecke + Devrient - CBDC Technology Overview
6. BIS - CBDC Policy Considerations
7. BIS - CBDC Information Security and Operational Risks
8. AWS - Central Bank Digital Currency Design
9. IBSi - ECB selects Fluency for digital euro trials
10. Finextra - Fluency offline payments testing
11. CryptoNews - SWIFT CBDC platform launch
12. G+D - Investment in FNA press release
13. Ledger Insights - G+D invests in CBDC simulation company
14. Quick Market Pitch - CBDC infrastructure investors
15. Ledger Insights - Accenture invests in CBDC firm Emtech
16. AVCA - LoftyInc invests in African CBDC infrastructure
17. Finextra - Fluency announces funding
18. IMF - Guide to CBDC Product Development
19. MIT DCI - Centralized Research
20. Bundesbank - MIT collaboration announcement