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BIS Innovation Hub launches new prototype CBDC

BIS Innovation Hub launches new prototype CBDC

Tourbillon is a new project which aims to explore how to improve cyber resiliency, scalability, and privacy as a prototype CBDC. The project has been launched by BIS Innovation Hub’s Swiss Centre.

The goal is for the prototype to be finished by mid-2023, and BIS states results will be relevant to both wholesale and retail CBDC.

CBDCs often involve trade-offs between the three elements of cyber resiliency, scalability, and privacy. Project Tourbillon aims at reconciling these trade-offs by combining technologies such as blind signatures and mix networks with the research on cryptography and CBDC design suggested by researchers David Chaum, inventor of eCash and creator of xx network, and Thomas Moser, alternate member of the Governing Board at the Swiss National Bank, seen in recent eCash 2.0 study.

To achieve cyber resiliency the project will be experimenting with quantum-resistant cryptography.

For scalability the project will use an architecture compatible with distributed ledger technology, although not based on it. By making each transaction separate, the system resources scale linearly. 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.

Morten Bech, head of the BIS Innovation Hub Swiss Centre, commented: “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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