When the BIS Innovation Hub unveiled its roadmap last week, one initiative with limited details was the Polaris Project that petered out in the Nordic hub. It has two related goals. One is to explore the resilience and security of central bank digital currency (CBDC). And the other one is to research CBDC offline. At this point, the BIS is looking for offline solution providers to submit their bids before February 24.

There are several potential motivations for an offline CBDC. Resilience is cited as a driving factor and the related issue of crisis management. For example, consider the tsunami in Japan in 2011. Imagine if physical cash had been phased out. Would users have been able to use a CBDC offline? There was no surprise when the Bank of Japan chose offline CBDCs as one of its first topics to investigate.

Another motivation is financial inclusion. Not everyone has a smartphone and Wi-Fi is not available everywhere, especially in more rural areas. That is one of the reasons why the demand for an offline CBDC is likely to vary between countries and regions.

Finally, an offline CBDC can look and feel much closer to physical cash because there is often no middleman.

But offline CBDCs can also be riskier. An analogy is making a debit card payment where the merchant cannot verify the validity of the card. There are some safe methodologies out there, but most providers suggest limiting cash amounts and other aspects of offline usage.

At the G20 CBDC Techsprint last October, IDEMIA’s offline CBDC wallet won an award. And Visa has previously written an article on offline CBDC.