Central Bank Digital Currency Privacy

Quick Take A common misconception about central bank digital currencies (CBDCs) is that privacy can’t exist while transacting, which makes many citizens anxious about general-purpose or retail CBDC.  Through the EUROchain research network, the European System of Central Banks (ESCB) developed a proof of concept using anonymity vouchers to enable privacy for certain retail CBDC transactions in 2019.  More recently, two McGill University researchers submitted a novel design proposal for a ‘Privacy-Hybrid CBDC’ to the Bank of Canada’s Model X Challenge.