A joint project by central banks has shown that it is possible to maintain privacy when making payments with national digital currencies.
Tourbillon, a project from the Innovation Hub of the Bank for International Settlements (BIS) in Switzerland, investigates payer anonymity with central bank digital currencies (CBDCs). According to the project’s final report released on November 29, the project considered payment methods that would not require users to disclose personal information to anyone, including merchants. However, to reduce tax evasion and fraudulent payments, merchants’ identities will be disclosed to banks at the time of payment.
As countries and regions around the world consider issuing digital fiat currencies, privacy has emerged as a top concern for their citizens.
“Privacy is an important user requirement, but it is the most difficult to resolve. The challenge is not just to promise privacy protection, but to protect it technically, and at the same time to ensure that such high levels of protection are not exploited.” “We need to make sure that this does not happen,” Thomas Moser, deputy policy director at the Swiss National Bank, said in a statement.
The report states that the tourbillon is a first step in exploring privacy, security and scalability for CBDC design. In this project, we built two scalable prototypes that can handle an increase in the number of transactions.
Further work is also needed to explore sustainable business models, offline payments and other features, the report said.
｜Translation: CoinDesk JAPAN
｜Edited by: Toshihiko Inoue
｜Image: Bank for International Settlements, Basel, Switzerland. (Shutterstock)
｜Original text: Central Bank Project Shows CBDC Payments Can Be Private