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BIS says digital cash can offer cash-like privacy but is not production ready

The Bank for International Settlements says a privacy-preserving digital cash prototype can match cash, while warning that bank data breaches remain a risk to users.

Why it matters: The report sets out what privacy a state-issued digital currency could realistically deliver, a question that shapes CBDC policy debates in the US, Brazil and elsewhere.

InvestIn.News NewsDesk · 1 min read
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Picture from Cointelegraph for: BIS says digital cash can offer cash-like privacy but is not production ready
Image: Cointelegraph
Original reporting: Zoltan Vardai, Cointelegraph

Key points

  • BIS published its Project Aurum Phase 2 report on Tuesday, covering a privacy-preserving digital cash prototype.
  • A breach at one bank would expose that bank's customer data but not identities at other counterparties, the report found.

The Bank for International Settlements says digital cash can offer cash-like privacy, but the technology is not yet ready for production, Cointelegraph reports. The finding comes in the BIS Project Aurum Phase 2 report, published on Tuesday, which builds on the organisation's existing Aurum codebase.

The prototype aims for a middle path between full anonymity and complete transaction transparency, the report says. BIS found that compromising a single bank could expose that institution's customer data, but would not reveal customer identities held by other counterparties. A compromise at validator level on its own would not be enough to expose end users.

The work examines the technical features needed for a privacy-preserving central bank digital currency. Critics of CBDCs have previously raised concerns about financial surveillance.

What to watch: A House vote on a permanent CBDC ban is approaching, according to the article.

Read the full story on Cointelegraph

Live updates on NewsFeeds:RegulationDesk editor: Keshav Aggarwal (accountable for this page; this summary was not edited by hand)

How this was produced: an AI model wrote this summary of Cointelegraph’s report, which we credit and link above. Read our Editorial and AI policy. Spotted a mistake? See Corrections.

Not investment advice. Read the risk disclaimer.

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