Blockchain advancements, currency digitalization, and declining cash usage have fueled global interest in Central Bank Digital Currencies (CBDCs). The BIS states that the hybrid model, where central banks authorize intermediaries to manage distribution, is more suitable than the direct model. However, designing a CBDC for practical implementation requires careful consideration. First, the public blockchain raises privacy concerns due to transparency. While zk-SNARKs can be a solution, they...

We propose a decentralized asset-transfer system that enjoys full privacy: no party can learn the details of a transaction, except for its issuer and its recipient. Furthermore, the recipient is only aware of the amount of the transaction. Our system does not rely on consensus or synchrony assumptions, and therefore, it is responsive, since it runs at the actual network speed. Under the hood, every transaction creates a consumable coin equipped with a non-interactive zero-knowledge proof...

Offline payments present an opportunity for central bank digital currency to address the lack of digital financial inclusion plaguing existing digital payment solutions. However, the design of secure offline payments is a complex undertaking; for example, the lack of connectivity during the payments renders double spending attacks trivial. While the identification of double spenders and penal sanctions may curb attacks by individuals, they may not be sufficient against concerted efforts by...

Distributed point functions (DPF) are increasingly becoming a foundational tool with applications for application-specific and general secure computation. While two-party DPF constructions are readily available for those applications with satisfiable performance, the three-party ones are left behind in both security and efficiency. In this paper we close this gap and propose the first three-party DPF construction that matches the state-of-the-art two-party DPF on all metrics. Namely, it...

This article presents an innovative project for a Central Bank Digital Currency (CBDC) infrastructure. Focusing on security and reliability, the proposed architecture: (1) employs post-quantum cryptography (PQC) algorithms for long-term security, even against attackers with access to cryptographically-relevant quantum computers; (2) can be integrated with a Trusted Execution Environment (TEE) to safeguard the confidentiality of transaction contents as they are processed by third-parties; and...

Recently, with the increasing interest in Central Bank Digital Currency (CBDC), many countries have been working on researching and developing digital currency. The most important reasons for this interest are that CBDC eliminates the disadvantages of traditional currencies and provides a safer, faster, and more efficient payment system. These benefits also come with challenges, such as safeguarding individuals’ privacy and ensuring regulatory mechanisms. While most researches address the...

Central Bank Digital Currency (CBDC) is in the phase of discussion in most of countries. In this paper, we consider the security issues of centralized retail CBDC. Our focus is on the design and analysis of the underlying cryptographic protocol. The main security requirements against the protocol are transaction anonymity and protection against tax evasion. The protocol provides security guarantees in case of the strongest model of an execution environment which is the general concurrent...

Cryptocurrencies are used in several, distinct use cases, thereby sustaining the existence of many ledgers that are heterogeneous in terms of design and purpose. In addition, the interest of central banks in deploying Central Bank Digital Currency (CBDC) has spurred a blooming number of conceptually different proposals from central banks and academia. As a result of the diversity of cryptocurrency and CBDC ledgers, interoperability, i.e., the seamless transfer of value between users that...

In recent years, many major economies have paid close attention to central bank digital currency (CBDC). As an optional attribute of CBDC, dual offline transaction is considered to have great practical value under the circumstances for payment without network connection. However, there is no public report or paper on how to securely design or implement the dual offline transaction function specifically for CBDC. In this paper, we propose DOT-M, a practical dual offline transaction scheme...

Central Bank Digital Currencies (CBDCs) aspire to offer a digital replacement for physical cash and, as such, must address two fundamental yet conflicting requirements. On the one hand, they should be private to prevent the emergence of a financial “panopticon.” On the other hand, they must be regulation friendly, facilitating threshold-limiting, tracing, and counterparty auditing functionalities necessary for compliance with regulations such as Know Your Customer (KYC), Anti-Money...

In light of continued innovation in money and payments, many central banks are exploring the creation of a central bank digital currency (CBDC), a new form of central bank money which supplements existing central bank reserve account balances and physical currency. This paper presents Hamilton, a flexible transaction processor design that supports a range of models for a CBDC and minimizes data storage in the core transaction processor by storing unspent funds as opaque hashes. Hamilton...

Thousands of digital money protocols compete for attention; the vast majority of them are a minor variation of the Satoshi Nakamoto 2008 proposal. It is time to extract the underlying principles of the Bitcoin revolution and re-assemble them in a way that preserves its benefits and gets rid of its faults. BitMint*LeVeL is a move in this direction. It upholds the fundamental migration of money from hidden bank accounts to cryptographically protected publicly exposed digital coins; it enables...

Due to the popularity of blockchain-based cryptocurrencies, the increasing digitalization of payments, and the constantly reducing role of cash in society, central banks have shown an increased interest in deploying central bank digital currencies (CBDCs) that could serve as a digital cash-equivalent. While most recent research on CBDCs focuses on blockchain technology, it is not clear that this choice of technology provides the optimal solution. In particular, the centralized trust model of...

Several Central Bank Digital Currency (CBDC) projects are considering the development of a digital currency that is managed on a permissioned blockchain, i.e. only authorized entities are involved in transactions verification. In this paper, we explore the best possible balance between privacy and accountability in such a traceable digital currency. Indeed, in case of suspicion of fraud or money laundering activity, it is important to enable the retrieval of the identity of a payer or a...