The Bank for International Settlements (BIS) said digital cash can offer privacy properties similar to cash, but highlighted remaining risks, including how potential bank data breaches may expose users’ personal data.
While digital cash can achieve “cash-like privacy,” the technology stack is not yet “production ready,” wrote BIS in its Project Aurum Phase 2 report, published on Tuesday.
This phase implements a privacy-preserving digital cash prototype using BIS’s existing Aurum codebase to take a balanced approach between complete anonymity and full transaction transparency, BIS said.
BIS found that compromising one bank may expose its customer data, but would not expose customer identities from other counterparties. A validator-level compromise alone would not be enough to expose end users, according to the report.
The BIS report explores the technical features needed to establish a privacy-preserving central bank…
