The Bank of International Settlements (BIS) Innovation Hub’s Swiss Centre has launched a new project as a prototype CBDC.
According to Finextra, Tourbillion is a new project which aims to explore how to improve cyber resiliency, scalability and privacy as a prototype CBDC.
The goal for the project is for the prototype to be finished by mid-next year, and BIS said that results will be relevant to both wholesale and retail CBDC.
Finextra noted that CBDCs often involve trade-offs between the three elements of cyber resiliency, scalability and privacy. Project Tourbillion aims at reconciling these trade-offs by combining technologies such as blind signatures and mix networks with the research on cryptography and CBDC design.
To focus on achieving cyber resiliency, the project will be experimenting with quantum-resistant cryptography. In addition, the project will use an architecture compatible with distributed ledger technology, although not based on it.
The project seeks to verify the linear scalability of the design with realistic parameters. Tourbillon aims to create privacy by providing it for the payment sender but not for the recipient. Regulatory and compliance checks will continue to apply.
BIS Innovation Hub Swiss Centre head Morten Bech said, “Digital central bank money can make payments better and more inclusive. Yet delivering a CBDC involves difficult trade-offs between cyber resilience, scalability and user privacy. Project Tourbillon will build and test a prototype that reconciles these trade-offs and pushes central banks’ technological frontier.”
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Copyright © 2018 RegTech Analyst