ECB Proposed the Introduction of “Anonymity Vouchers” for the CBDC

December 17, 2019, by Marko Vidrih on ALTCOIN MAGAZINE

This Tuesday, the European Central Bank published a new report on the topic of a hypothetical digital currency, according to which “anonymity vouchers” can be provided to consumers. They, according to the authors, will provide limited privacy of retail payments. In this way, the ECB expects to offer a compromise solution between users’ need for privacy and anti-money laundering requirements.

“The ongoing digitalization of the economy represents a major challenge for the payments ecosystem, requiring that a balance be struck between allowing a certain degree of privacy in electronic payments and ensuring compliance with regulations aimed at tackling money laundering and the financing of terrorism,” the report says.

Anonymity vouchers will be provided to all account holders at certain intervals regardless of the balance and can be used to circumvent the check by a hypothetical regulator. At the same time, both participants in the transaction must have vouchers, they cannot be transferred, and after a certain time they will lose their force, the document says.

“Our latest research shows that it is possible to build a simplified payment system for central bank digital currencies. Such a system would safeguard users’ privacy for low-value transactions while ensuring that higher-value transfers are subject to anti-money laundering checks,” the ECB writes on Twitter.

The pilot model was developed in collaboration with Accenture and R3 based on the latest Corda blockchain platform. In total, four nodes participate in such a transaction, two of which are represented by intermediaries in the person of the central bank and the anti-money laundering department. It is assumed that such a system will limit the amount of funds transferred anonymously, but at the same time, keep the identities of users and the amount of transfers secret.

At the same time, the authors acknowledge the existence of significant issues that still need to be addressed, for example, regarding the availability of data to persons not participating in transactions, and the ability of users to carry out transactions in the absence of intermediary nodes. As a possible solution, it is proposed to use evidence with zero disclosure and secure calculations. The problems of scalability and compatibility with existing payment systems were not considered in the pilot project.

Earlier, ECB President Christine Lagarde expressed the view that the European payment system should remain at the forefront of innovation in the context of stablecoins.

Author: Marko Vidrih