Project Tourbillon: CBDCs Can Meet Privacy Requirements, BIS Research Reveals
The Bank for International Settlement (BIS) has released the final report on Project Tourbillion, its privacy-inclined Central Bank Digital Currency (CBDC) project.
A Nov 29 release shows a pathway to achieving privacy standards in CBDC deployment and usage with two prototypes; eCash 1.0 and eCash 2.0 alongside other features geared towards anonymity.
“Project Tourbillon introduces a new privacy paradigm that balances user needs and public policy objectives: payer anonymity. For example, a consumer who pays a merchant using CBDCs does not disclose personal information to anyone, including the merchant, banks, and the central bank.”
The project highlights privacy, security, and scalability as key components in rolling out a new model CBDC to allay the fears of the public.
Payer anonymity is central to the project as it protects the payer’s data and limited information about the payee. While the payer remains protected, the identity of the merchant is revealed to the payer but remains only disclosed to the central bank.
The Central will not see personal payment data as it monitors circulation in the applied jurisdiction. The authors noted that the move seeks to create safe digital currency with regulatory clamping down on illicit transactions without jeopardizing user privacy.
“A consumer paying a merchant with CBDCs is anonymous to all parties, including the merchant, banks, and the central bank.”
This model also integrates security features to ensure confidentiality and prevent incidents of cyber threats while projecting scalability at all times.
Scalability remains pivotal in creating cross-border payment systems as they need to adjust to different mechanisms without endangering performance, especially in peak seasons
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