Today the BIS Innovation Hub Swiss Centre announced a new central bank digital currency (CBDC) research Project Tourbillon with David Chaum, a cryptographer and founder of eCash, a form of digital cash piloted in the 1990s. Together with Thomas Moser, an alternate board member of the Swiss National Bank (SNB), Chaum published a paper on eCash 2.0.
The key features of the solution are cyber resiliency including from quantum computers, scalability and privacy. The two authors wrote another paper last year, which shares many of the same features and we explored more deeply.
Privacy and anonymity are the most challenging demands of a CBDC. eCash is capable of anonymous payments. However, to receive the cash, the consumer must go through a KYC process with their commercial bank. The clever feature is that even though the commercial bank and central banks authorize you to receive the CBDC, they can’t identify the coins. Comparing it to a banknote, you know the serial numbers of your notes, but the banks don’t.
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