Technology vs. Sovereignty: Cosmos Quietly Adopted by CBDC

Written by Sanqing

introduction

On May 22, 2025, Maghnus Mareneck, co-CEO of Interchain Labs, revealed that the Colombian government is working with a consortium of banks to test a CBDC for cross-border payment scenarios on the Cosmos network, and has opted for a private, permissioned node model and the IBC Eureka technology stack. [Source: news.bitcoin.com]

There are no DAOs, no on-chain governance, just permissioned nodes and a distributed ledger. Who would have thought that Cosmos, known as the "decentralised Lego", would become an ideal partner for central bank digital currencies?

Cosmos: Chain-building blocks, just the right power jacket

Cosmos is not a public chain, but a complete set of "chain building + chain" toolbox, which is specially designed for multi-chain architecture. Compared with the standardised and open Ethereum, Cosmos's flexibility and controllability provide an ideal template for central banks to "customise the sovereign ledger".

Cosmos SDK: Build a sovereign chain like LEGO

The Cosmos SDK is a modular development framework that central banks can assemble as needed:

• Added account access and KYC module

• Turn off the smart contract virtual machine to prevent "uncontrollable" contract deployment

• Add regulatory audits, targeted payments and other regulatory plug-ins

Tendermint BFT: Rotating as a "central bank"

Cosmos uses the Tendermint consensus, which does not rely on computing power for mining, but is supported by authorised validators to produce blocks in turns, with controllable node members, extremely low latency, and strong block determinism, which is naturally suitable for the real-time payment scenario of CBDC.

IBC: Chain-to-chain "TCP/IP"

IBC is Cosmos' cross-chain communication protocol:

• Proof-of-state and cross-chain support for assets

• Zone chains are independent and exchange authentication packets when necessary

• Implement chain-level whitelisting and packet review, and "controllable interoperability" instead of disorderly interoperability

With the help of this protocol and the ICS-20 standard, tokens such as ATOM and OSMO can be freely circulated among multiple zones in the Cosmos ecosystem without bridging.

Hub-and-Zone: Reject repetition of L2

The architecture of Cosmos is based on "Hub and Zone":

• Cosmos Hub is the earliest chain in the ecosystem, but it is not the "commander-in-chief"

• Zone refers to each independent chain, such as Osmosis and Juno, each chain has an independent ledger and validator

• They communicate with each other via IBC without the need for a hub relay

Each zone is a "pluggable, autonomous operational" sovereign chain that communicates with each other, but does not need to obey.

The Colombian Path: The Sovereign Calculation Behind Technology Selection

Colombia's CBDC chain is actually a zone with Cosmos technology.

• Don't rely on Cosmos Hub

• It does not communicate directly with other DeFi ecosystems

• It is a closed licensing chain that only borrows the three major components of Cosmos SDK, Tendermint, and IBC

For the Central Bank of Colombia, this is not a decentralised "idealism", but an "instrumental" option.

Cosmos vs. mBridge: The Trade-off Between Cost, Efficiency, and Control

In terms of the infrastructure selection of central bank digital currencies, Cosmos may not have thought that it would become one of the routes.

At present, the leading route is the Bank for International Settlements (BIS)-led mBridge, which cooperates with many countries - a consortium chain network that connects the CBDC networks of various countries (including central banks and international organisations, a total of 5 members, and more than 32 observer members), where the central banks of member countries set up Operator Nodes, which is a bit of a joint central bank, and allows commercial banks or other clearing and settlement institutions licensed by various countries to run nodes for currency exchange.

The author compares mBridge, Cosmos, and mainstream cross-chain bridges as follows:

Why didn't Colombia choose mBridge and switch to Cosmos?

On the one hand, mBridge is a product of the great power game, with a slow pace of technology update and a high access threshold. Cosmos, on the other hand, provides "out-of-the-box" technical components to build a native permissioned chain without complex negotiations or diplomatic coordination, while reserving the possibility of future interoperability through IBC.

This is more in line with the current realistic demands of Latin American economies:

• The budget is limited, and the construction should be fast

• Reluctant to rely solely on alliances dominated by a particular power

• We want to find a balance between compliance controls and blockchain innovation

If the pilot in Colombia goes well, Cosmos could become a new way for small and medium-sized economies to build sovereign digital currencies. A controlled, cost-acceptable, technology-dependent path is likely to be replicated by more sovereign states in South America, Africa, and even Southeast Asia. This is a classic triumph of "technical pragmatism".

epilogue

What Cosmos provides is a technology that is "neutral" and "tailorable": it does not presuppose governance answers, nor does it reject centralised deployment.

Colombia didn't join Web3, it just borrowed Cosmos. There are no open nodes, no on-chain governance, and no connection to the public chain ecology - this Cosmos-based CBDC chain is more like a streamlined and modified "sovereign currency machine".

However, the "cooling adaptation" of this Web3 technology in real-world scenarios is also a kind of recognition of its engineering value.