- Project Tourbillon by BIS Innovation Hub Swiss Centre innovates in retail CBDC design, balancing privacy, security, and scalability, while maintaining payer anonymity.
- Project Tourbillon centres on payer anonymity in CBDCs, developing two eCash prototypes for secure, cash-like digital transactions, and exploring quantum-safe cryptography, albeit with current limitations in speed and scalability.
- Some commentators endorse Project Tourbillon’s e-cash model, while BIS’s Morten Bech emphasises its focus on balancing the above-mentioned issues in CBDCs.
Why Project Tourbillon
Project Tourbillon is a pioneering step in addressing the balance between privacy, security, and scalability in the design of retail CBDCs, with a focus on maintaining the anonymity of the payer. It is being developed by the Bank for International Settlements (BIS) Innovation Hub Swiss Centre, which “introduces a new privacy paradigm for retail central bank digital currencies (CBDCs).”
The BIS states that while cash ensures total anonymity, it’s not usable online. Credit/debit cards offer confidentiality, with only banks and card operators accessing personal data. Cryptocurrencies usually provide pseudo-anonymity; though transaction details are public on the blockchain, potentially exposing identities.
Key aspects of the project include:
Payer Anonymity: The project’s objective is to maintain the confidentiality of the buyer’s identity in CBDC transactions by emulating the anonymity that is characteristic of cash transactions.This approach offers a level of privacy similar to cash, where the consumer’s personal information is not disclosed during a transaction, unlike current digital payment systems.
eCash Prototypes: Two prototypes were developed, eCash 1.0 and eCash 2.0, with the former resembling a cash-like digital payment instrument and the latter focusing on enhanced security features to prevent counterfeiting.
Quantum-Safe Cryptography: Recognising the potential threat of quantum computing to encryption schemes, Project Tourbillon explored the use of quantum-safe blind signatures for future security. This approach, however, currently limits transaction processing speed and scalability, indicating a need for further research in this area.
It will be interesting to see how the project progresses as the cash-like anonymity would provide a boost to CBDC development. Crypto commentator XavierLava welcomed the project having themselves advocated for the e-cash model for years.
Meanwhile Morten Bech, Head of the BIS Innovation Hub Swiss Centre, emphasised that while privacy is essential for a retail CBDC, it’s not the sole focus. Security and scalability are equally important for payment processing. In Project Tourbillon, they concentrated on balancing the protection of privacy with the speed of processing payments.
“Project Tourbillon is a first step in exploring privacy, security and scalability and their trade-offs in a retail CBDC design. Further work is needed, in particular, to improve quantum-safe cryptography, to extend the use cases, and explore viability.”
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