BIS Innovation Hub Presents Private CBDC Project
29 Nov, 2023 ● Coin news
The Bank for International Settlements (BIS) Innovation Hub has brought forward the final report on its private central bank digital currency (CBDC) initiative, Project Tourbillon.
The project's framework prototypes aim to enable CBDC transactions to be made anonymously.
The 46-page report, which was released on November 29, examines the ideas of security, privacy, and scalability using two prototypes that are based on the designs of David Chaum, one of the pioneers of cryptography.
The prototypes were named eCash 1.0 and eCash 2.0. Although the former offers "unconditional payer anonymity," the security features of the latter are "more resilient."
“It is feasible to implement a CBDC that provides payer anonymity while combating illicit transactions." the report states.
“A consumer paying a merchant with CBDCs is anonymous to all parties, including the merchant, banks and the central bank.”
In this scheme, the payer is the only one who knows the identity of the merchant; the merchant's bank is only informed as part of the payment.
The central bank can keep an eye on the overall circulation of CBDCs but does not have access to any personal payment information.
To use the CBDC, however, all users must first go through a Know Your Customer (KYC) process at a commercial bank.
The merchant's bank is still in charge of making sure that transactions abide by legal requirements like tax evasion, countering the financing of terrorism, and anti-money laundering. This is similar to the current financial system.
The study comes to the conclusion that because Tourbillon's payment method makes use of already-existing technologies like QR codes, proof-of-stake protocols, and account relationships between customers, merchants, banks and central banks, it is simple to incorporate into the current payment environment.
Sources:
https://cointelegraph.com/news/bis-innovation-hub-private-cbdc-project
