The European Central Bank announced a stage win in the global race for the first introduction of a digital central bank currency (CBDC). In the whitepaper published on December 17, the ECB presents the proof of concept of a CBDC. The project, developed on the DLT platform Corda, combines the protection of pseudonymity with the requirements of anti-money laundering (AML) and counter-terrorism (CFT) in a two-stage payment model.
The ECB’s payment system distributes anonymity evidence that users can use to process small transactions without having to reveal their identity. Every user in the network is identified with a pseudonym and receives a certain number of documents every month. In the case of small transactions, the supporting documents can be used to prevent the transfer of personal data to the central bank or intermediaries.
For larger transactions that exceed the permitted allowance for anonymous transfers, however, the guidelines on money laundering and counter-terrorism apply. Special AML authorities then have access…