Project Aurum Phase 2 implements a privacy-preserving digital cash prototype upon the existing Aurum codebase to enhance policymakers’ understanding how privacy-enhancing technologies (PETs) may alleviate the dilemma of privacy and compliance in digital cash. Adopting privacy by design and privacy by default principles, the prototype illustrates a balanced approach between complete anonymity on the one hand and full transaction transparency on the other. It also implements customisable functionalities to meet business needs for compliance and operations.
Relevance to central banks and next steps
Project Aurum Phase 2 demonstrates how privacy can be embedded into the design of digital cash through technology, rather than relying solely on institutional safeguards. It helps central banks and policymakers better understand the considerations and trade-offs.
The project also highlights how the privacy-preserving design reduces unnecessary exposure of personal and transaction data, while maintaining compliance and system integrity. The prototype functionalities illustrates policy flexibility and dynamics among privacy, transparency, compliance and other attributes. They can be calibrated to reflect different policy choices and risk appetites for digital payment.
In addition to digital cash, central banks can benefit from further studies of PETs across a range of use cases. Some additional lessons learnt surrounding the usage of PETs are proposed for reference.
For further information on Project Aurum Phase 2, please contact: hongkong.centre@bisih.org.