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Key Points:
- BIS Innovation Hub Hong Kong initiates the second phase of Project Aurum in collaboration with HKMA.
- The first phase demonstrated the viability of integrating a wholesale interbank system and a retail e-wallet using an advanced technological stack.
- Addressing a significant concern, Project Aurum 2.0 prioritizes enhancing privacy for retail central bank digital currencies (CBDC).
- Public consultations worldwide emphasize the pivotal role of privacy as consumers consider the adoption of CBDCs.
- Central banks recognize the need to delicately balance privacy concerns with the imperative of transparency in CBDC implementations.
- Project Aurum 2.0 expands collaboration by involving universities and privacy experts to leverage diverse expertise.
- The project aims to deepen central banks’ practical understanding of privacy in CBDC system design.
- Showcasing advancements, the project explores “privacy by design” principles and tests technologies like pseudonymization and zero-knowledge proof.
- Rigorous testing will assess how heightened privacy impacts system performance and compliance.
The BIS Innovation Hub Hong Kong centre has officially launched the second phase of Project Aurum in partnership with the Hong Kong Monetary Authority (HKMA). Following the successful feasibility testing of a cutting-edge technological stack integrating a wholesale interbank system and a retail e-wallet in its inaugural phase, Project Aurum 2.0 is set to address a critical concern—enhancing privacy for retail central bank digital currencies (CBDC).
Privacy emerges as a pivotal consideration for consumers contemplating CBDC adoption, a sentiment underscored by various public consultations worldwide. Recognizing this, central banks are now actively engaged in striking a delicate balance between privacy and transparency.
Expanding on the existing Aurum prototype, the upcoming phase aims to tap into the expertise of multiple disciplines, fostering collaboration with universities and privacy experts. Project Aurum 2.0 seeks to deepen the practical understanding of central banks regarding privacy in the design of their CBDC systems, showcasing technological advancements that safeguard personal data in the CBDC realm.
With “privacy by design” as a guiding principle, the project will explore the applicability of various privacy-enhancing technologies, such as pseudonymization and zero-knowledge proof. Furthermore, it will rigorously test the impact of heightened privacy on system performance and compliance.
This groundbreaking initiative signifies a crucial step toward shaping the future landscape of CBDCs, emphasizing the commitment to addressing consumer concerns while pushing the boundaries of technological innovation in the financial sector. Stay tuned for further updates on Project Aurum 2.0 as it paves the way for a new era in central bank digital currencies.
References:
https://www.bis.org/about/bisih/topics/cbdc/aurum2_0.htm