- David Chaum introduced CBDC technology to enhance privacy.
- CBDC may take over as the industry standard for crypto transactions.
- The CBDC can prevent tracking down the unlawful currency.
David Chaum, the developer of eCash and creator of the cryptocurrency Elixxir, has recently announced that his team is developing a next-generation technology called “CBDC,” which will enhance privacy.
David Chaum thinks a privacy-protecting CBDC may be implemented in a democratic environment. The prototype is expected to be finished by mid of next year.
This is a significant development, as cryptocurrency has always been touted as a way to protect privacy.
The Bank of International Settlements (BIS) Innovation Hub will oversee the project’s development. Chaum is collaborating with the Swiss National Bank (SNB) on Project Tourbillon, which is intended for central bank money that prioritizes privacy.
The idea, which is based on Chaum’s blind signature approach, has been presented by Chaum and Thomas Moser, an alternate member of the SNB governing board, in a joint research article.
CBDC technology is still under development, so it is unclear when it will be available to the public. However, if it proves successful, CBDC may become the standard for privacy-protecting crypto transactions.
According to Morten Bech, Director of the BIS Innovation Hub Swiss Center, the initiative avoids trade-offs between user privacy, scalability, and cyber resilience.
Chaum thinks it’s crucial to demonstrate that a CBDC can protect privacy so that no government can claim it’s impossible and use it to justify creating anything akin to the Chinese model.
In Chaum’s opinion, the device he created can avoid both outcomes, preventing anyone from monitoring how people spend their money while enabling law enforcement to follow illegal cash.
if you choose to use government-issued money, the government should not be able to see how you spend it
CBDC is designed to allow people to conduct transactions without revealing their personal information, which can help avoid financial scams and other malicious activities.
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