PayOff: A Regulated Central Bank Digital Currency with Private Offline Payments

• URL: http://arxiv.org/abs/2408.06956v1
• Date: Tue, 13 Aug 2024 15:15:06 GMT
• Title: PayOff: A Regulated Central Bank Digital Currency with Private Offline Payments
• Authors: Carolin Beer, Sheila Zingg, Kari Kostiainen, Karl Wüst, Vedran Capkun, Srdjan Capkun,
• Abstract summary: The European Central Bank is preparing for the potential issuance of a central bank digital currency (CBDC), called the digital euro. offline payments are expected to enable cash-like privacy, local payment settlement, and the enforcement of holding limits. This paper presents PayOff, a novel CBDC design motivated by the digital euro regulation, which focuses on offline payments.
• Score: 13.78379361552975
• License: http://creativecommons.org/licenses/by/4.0/
• Abstract: The European Central Bank is preparing for the potential issuance of a central bank digital currency (CBDC), called the digital euro. A recent regulatory proposal by the European Commission defines several requirements for the digital euro, such as support for both online and offline payments. Offline payments are expected to enable cash-like privacy, local payment settlement, and the enforcement of holding limits. While other central banks have expressed similar desired functionality, achieving such offline payments poses a novel technical challenge. We observe that none of the existing research solutions, including offline E-cash schemes, are fully compliant. Proposed solutions based on secure elements offer no guarantees in case of compromise and can therefore lead to significant payment fraud. The main contribution of this paper is PayOff, a novel CBDC design motivated by the digital euro regulation, which focuses on offline payments. We analyze the security implications of local payment settlement and identify new security objectives. PayOff protects user privacy, supports complex regulations such as holding limits, and implements safeguards to increase robustness against secure element failure. Our analysis shows that PayOff provides strong privacy and identifies residual leakages that may arise in real-world deployments. Our evaluation shows that offline payments can be fast and that the central bank can handle high payment loads with moderate computing resources. However, the main limitation of PayOff is that offline payment messages and storage requirements grow in the number of payments that the sender makes or receives without going online in between.

Related papers

• 2FA: Navigating the Challenges and Solutions for Inclusive Access [55.2480439325792]
  Two-Factor Authentication (2FA) has emerged as a critical solution to protect online activities. This paper examines the intricacies of deploying 2FA in a way that is secure and accessible to all users. An analysis was conducted to examine the implementation and availability of various 2FA methods across popular online platforms.
  arXiv  Detail & Related papers  (2025-02-17T12:23:53Z)
• How to design a Public Key Infrastructure for a Central Bank Digital Currency [0.0]
  Central Bank Digital Currency (CBDC) is a new form of money, issued by a country's or region's central bank, that can be used for a variety of payment scenarios. There is a need for robust and scalable Public Key Infrastructure (PKI) for CBDC to ensure the continued trust of all entities in the system. This paper discusses the criteria that should flow into the design of a PKI and proposes a certificate hierarchy, together with a rollover concept ensuring continuous operation of the system.
  arXiv  Detail & Related papers  (2024-12-05T10:41:38Z)
• Securing Legacy Communication Networks via Authenticated Cyclic Redundancy Integrity Check [98.34702864029796]
  We propose Authenticated Cyclic Redundancy Integrity Check (ACRIC) ACRIC preserves backward compatibility without requiring additional hardware and is protocol agnostic. We show that ACRIC offers robust security with minimal transmission overhead ( 1 ms)
  arXiv  Detail & Related papers  (2024-11-21T18:26:05Z)
• SPOQchain: Platform for Secure, Scalable, and Privacy-Preserving Supply Chain Tracing and Counterfeit Protection [46.68279506084277]
  This work proposes SPOQchain, a novel blockchain-based platform that provides comprehensive traceability and originality verification. It provides an analysis of privacy and security aspects, demonstrating the need and qualification of SPOQchain for the future of supply chain tracing.
  arXiv  Detail & Related papers  (2024-08-30T07:15:43Z)
• Offline Digital Euro: a Minimum Viable CBDC using Groth-Sahai proofs [0.0]
  Current digital payment solutions are fragile and offer less privacy than traditional cash. No transaction can be executed during server malfunctions or power outages. This thesis proposes a design and a first implementation for an offline-first digital euro.
  arXiv  Detail & Related papers  (2024-07-01T09:55:14Z)
• IT Strategic alignment in the decentralized finance (DeFi): CBDC and digital currencies [49.1574468325115]
  Decentralized finance (DeFi) is a disruptive-based financial infrastructure. This paper seeks to answer two main questions 1) What are the common IT elements in the DeFi? And 2) How the elements to the IT strategic alignment in DeFi?
  arXiv  Detail & Related papers  (2024-05-17T10:19:20Z)
• Enhancing Trust and Privacy in Distributed Networks: A Comprehensive Survey on Blockchain-based Federated Learning [51.13534069758711]
  Decentralized approaches like blockchain offer a compelling solution by implementing a consensus mechanism among multiple entities. Federated Learning (FL) enables participants to collaboratively train models while safeguarding data privacy. This paper investigates the synergy between blockchain's security features and FL's privacy-preserving model training capabilities.
  arXiv  Detail & Related papers  (2024-03-28T07:08:26Z)
• A Scalable Architecture for Electronic Payments [0.0]
  We present a scalable architecture for electronic retail payments via central bank digital currency. We offer a solution to the perceived conflict between robust regulatory oversight and consumer affordances such as privacy and control.
  arXiv  Detail & Related papers  (2021-10-26T16:38:45Z)
• A Digital Currency Architecture for Privacy and Owner-Custodianship [0.0]
  We propose an approach to digital currency that would allow people without banking relationships to transact electronically and privately. Our proposal introduces a government-backed, privately-operated digital currency infrastructure. We argue that our system can restore and preserve the salient features of cash, including privacy, owner-custodianship, fungibility, and accessibility.
  arXiv  Detail & Related papers  (2021-01-13T18:44:10Z)
• Regulation conform DLT-operable payment adapter based on trustless - justified trust combined generalized state channels [77.34726150561087]
  Economy of Things (EoT) will be based on software agents running on peer-to-peer trustless networks. We give an overview of current solutions that differ in their fundamental values and technological possibilities. We propose to combine the strengths of the crypto based, decentralized trustless elements with established and well regulated means of payment.
  arXiv  Detail & Related papers  (2020-07-03T10:45:55Z)

This list is automatically generated from the titles and abstracts of the papers in this site.

This site does not guarantee the quality of this site (including all information) and is not responsible for any consequences.