The Bank for International Settlements said digital cash could provide privacy similar to physical cash, but warned that the technology is not yet ready for production use because risks including bank data breaches remain.
According to Cointelegraph, the assessment appears in the BIS’s Project Aurum Phase 2 report, published Tuesday. The project developed a privacy-preserving digital cash prototype using the BIS’s existing Aurum codebase.
The findings are relevant to the design of central bank digital currencies, or CBDCs. Unlike physical cash, a CBDC would be a digital form of money issued by a central bank. Privacy is therefore a central design question: systems must protect users’ personal and payment information while retaining enough visibility to support the integrity of the payment network.
A balance between privacy and transparency
The BIS said the prototype was designed to avoid both complete anonymity and full transaction transparency. Its stated objective was a middle ground in which digital cash could deliver “cash-like privacy” without making every payment entirely opaque.
The report also examined what could happen if parts of the system were compromised. A breach at one bank could expose that institution’s customer data, the BIS found, but would not reveal the identities of customers dealing through other counterparties. Separately, compromising a validator alone would not be sufficient to identify end users.
Validators are entities that help verify or process transactions in a digital payment system. The BIS findings suggest that separating roles across the technology stack can limit the information exposed by a single breach. However, the institution said the overall technology stack is not yet “production ready,” meaning additional work is needed before such a system could be deployed for real-world use.
Why CBDC privacy remains contentious
The report addresses concerns that CBDCs could give authorities extensive insight into people’s financial activity. Critics have also questioned whether digital central-bank money could allow transactions or wallet balances to be restricted.
The source material points to Brazil as an example of the debate. In 2023, Brazil’s central bank published the source code for its CBDC pilot. Within days, observers identified mechanisms that could allow the central bank to freeze or reduce funds in users’ CBDC wallets.
The issue has also featured in US policy. In January, President Donald Trump banned federal agencies from issuing a CBDC, citing financial stability and privacy concerns. The BIS report does not resolve those wider policy disagreements, but focuses on the technical features that could support privacy-preserving digital cash.
Moneyiar market picture
Moneyiar data at 20:38-20:39 on October 13, 2026, showed mixed performance among the tracked assets:
- Comedian (BAN) traded at $0.058659383, down 2.3% over 24 hours and 10.6% over seven days.
- Data Network (DATA) was $0.2052461692, down 3.18% over 24 hours and 0.44% over seven days.
- Alchemy Pay (ACH) stood at $0.0058293824, down 2.91% over 24 hours and 0.58% over seven days.
- Propy (PRO) was $0.3608134068, up 1.5% over 24 hours but down 1.33% over seven days.
These figures describe the listed assets’ market movements and are separate from the BIS’s research into digital cash and CBDC privacy.
