Enhancing the privacy of a digital pound (BoE and MIT DCI)
The Bank of England (BoE) published a joint report with MIT Digital Currency Initiative (DCI) on how privacy enhancing technologies (PETs) could be used to enhance the privacy of a potential digital pound. The paper focused on pseudonymization, zero-knowledge proofs, and secure multiparty computing. It found that these technologies present opportunities for a central bank digital currency (CBDC) to be at least as private as current forms of digital money and potentially even more private as they mature. While PETs, on their own, do not guarantee privacy, the approaches explored in this paper seek to safeguard consumers’ private information, enable compliance with existing regulations, and strengthen trust and confidence in a digital pound, should one be launched in the future. [Read more at the MIT DCI]
Central bank money as a catalyst for fungibility: the case of stablecoins (ECB)
A paper co-written by a European Central Bank (ECB) staffer suggests required fungibility conditions for reserve asset-backed stablecoins issued by different issuers on different platforms. These include interoperable payment and settlement technologies, payment settlement finality, and seamless stablecoin convertibility into the quasi-ultimate means of payment (e.g., central bank money). Also, issuers should have sufficiently strong liquidity and capital positions to meet redemption obligations, including to cover potential variations in liquid off-chain asset price volatility. [Read more at SSRN]
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Upcoming Speaking Engagements:
- Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [Find out more and register here]
And just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at john@kiffmeister.com.
