BIS Innovation Hub Releases Project Aurum Phase 2 Report, Exploring Privacy-Enhancing Technologies for Digital Cash

On October 13 that the BIS Innovation Hub announced the official release of Project Aurum Phase 2. Built upon the existing Aurum codebase, the project develops a privacy-preserving digital cash prototype intended to help central banks and policymakers deeply understand how Privacy-Enhancing Technologies (PETs) can resolve the dilemma digital cash faces between privacy protection and regulatory compliance.

The prototype adopts "Privacy by Design" and "Privacy by Default" principles, seeking a balance between complete anonymity and full transparency, while providing customizable functions to meet compliance and operational needs. The project emphasizes that privacy protection should be embedded into the digital cash design itself through technological means, rather than relying solely on institutional guarantees, while minimizing unnecessary exposure of personal and transaction data to maintain system integrity.

The report also notes that the relevant features can be flexibly adjusted based on different policy directions and risk preferences, providing guidance for central banks worldwide in formulating policies within the digital payment sector. The BIS further recommends that central banks further explore the application potential of PETs in broader scenarios.