Researchers at the Bank for International Settlements (BIS) have unveiled Project Tourbillon, which involves developing two prototypes of a central bank digital currency (CBDC) for private entities.
The BIS Innovation Hub has published a report on the results of Project Tourbillon. Two private CBDC prototypes were developed as part of the project. The first provides complete anonymity for the payer, while the second offers increased resilience in terms of security.
Project Tourbillon involved exploring the concepts of privacy, security, and scalability of digital currencies. The authors used eCash 1.0 and eCash 2.0 designed by cryptography pioneer David Chaum as a technical basis.
The researchers concluded that it’s technically feasible to implement a CBDC that provides both a high level of privacy for the payer and combats illegal transactions. Moreover, Project Tourbillon achieved complete anonymity for the payer. At the same time, the payer knows the identity of the seller, which is also disclosed to the intermediary bank during the transaction. The central bank in the described scheme doesn’t track personal data but can analyze CBDC circulation on a global level.
The report indicates that the prototypes developed under Project Tourbillon can be easily integrated into the existing payment environment. However, users will still have to pass KYC when connecting to such a system through the commercial bank, whose representatives will be responsible for ensuring that transactions comply with all regulatory requirements.
The Bank for International Settlements recently announced the completion of the first phase of Project Atlas, conducted jointly with several central banks of the European Union. As part of the project, the concept of a monitoring system for international transfers made in cryptocurrencies was developed.
