1、 The digital pound:Technology Working Paper February 2023 The digital pound:Technology Working Paper February 2023 Bank of England 2023 Page 2 Contents Executive summary 3 1:Introduction 8 2:Functional requirements 14 3:Technology design considerations 19 3.1:Privacy 20 3.2:Security 25 3.3:Resilienc

2、e 33 3.4:Performance 39 3.5:Extensibility 42 3.6:Energy usage 44 4:Illustrative conceptual model 45 4.1:Core ledger 48 4.2:Analytics 53 4.3:Alias service 54 4.4:API layer 57 4.5:Devices and payments 62 4.6:Interoperability 68 4.7:Programmability 70 4.8:Offline payments 78 5:Next steps and discussion

3、 questions 81 Glossary 84 Page 3 Executive summary This paper accompanies the digital pound Consultation Paper(CP),The digital pound:a new form of money for households and businesses?,and outlines the Bank of Englands(the Banks)thinking on the technical requirements and design considerations for a U

4、K central bank digital currency(CBDC).This paper sets out the Banks emerging thinking on CBDC technology and seeks feedback on the potential approach to important technology considerations.This paper does not set out a final design for CBDC.Rather,it sets out one possible approach to CBDC architectu

5、re.The Banks thinking on these matters will evolve as our work accelerates.This paper and the digital pound CP are products of the research and exploration phase of CBDC development,and mark the start of the design phase(Figure 2).In the design phase,the Bank will conduct experimentation which will

6、inform an evaluation of the technology feasibility of CBDC and help to determine the optimal design and technology architecture.This paper builds on the functional and economic design choices for CBDC,which are outlined in the digital pound CP.The Bank and His Majestys Treasury(HM Treasury)have iden

7、tified two primary motivations for a UK CBDC:sustaining access to,and promoting the usefulness of,central bank money;and promoting innovation,choice and efficiency in domestic payments.These motivations have informed the functional and economic design choices for CBDC,which are set out in the digita

8、l pound CP.The platform model is currently the preferred model for offering a UK CBDC(Figure 4).In this model,the Bank hosts the core ledger and an application programming interface(API)layer.The API layer would allow private sector firms,known as Payment Interface Providers(PIPs)and External Servic

9、e Interface Providers(ESIPs),access to the core ledger functionality in order to provide user services.Access to the core ledger would be subject to approval by the Bank,based on objective and transparent criteria,and subject to PIPs and ESIPs having appropriate regulatory status.This paper explores

10、 six technology design considerations,which help to organise and guide the Banks work on CBDC technology.The design considerations outlined in this paper are privacy,security,resilience,performance,extensibility and energy usage.These considerations guide the Banks current thinking on the technology

11、 requirements for a UK CBDC and will likely have significant impact on the design choices for CBDC.Page 4 Privacy:The privacy design considerations are informed by the Bank and HM Treasurys public policy objectives related to privacy.The CBDC system would be designed to protect user privacy,while al

12、lowing PIPs and ESIPs the minimum necessary access to transaction data needed to provide CBDC services and to fulfil their legal and regulatory obligations.The Bank considers that privacy-enhancing technologies(PETs)might assist in meeting these requirements.However,it is important to be mindful of

13、the complexities that PETs may introduce and the impact they might have on the other technology design considerations.Security:It is critical that any CBDC design identifies and guards against security risks.A CBDC may be a potential target for cyber threats from a range of threat actors.The securit

14、y risks could increase due to additional functionality of a CBDC,as well as the number of ecosystem participants.To manage new and existing risks,the CBDC system could be designed to support the rapid adoption of new cryptographic algorithms,use secure access management,and incorporate a comprehensi

15、ve security assurance programme.The Bank might also employ a layered security approach,which involves multiple layers of security controls.Resilience:The CBDC system should be resilient to disruption.Disruption may have far-reaching consequences for user confidence,data integrity and financial stabi

16、lity.Resilience might be achieved through containment and redundancy mechanisms.The Bank has established preliminary resilience requirements for a CBDC,including operating 24/7.Current RTGS and CHAPS services have a target uptime of at least 99.95%,and that would constitute a minimum expectation for

17、 Bank-managed CBDC infrastructure.However,we will also explore whether an uptime target of closer to 100%would be appropriate and deliverable(in particular 99.999%).Performance:The CBDC system should be able to handle a high number of transactions and confirm and settle these transactions as quickly

18、 as possible.The Bank estimates that throughput of approximately 30,000 transactions per second,and confirmation and settlement in under one second,might be needed.To enable high performance,the system might utilise certain techniques,including horizontal scaling,multi-destination payments and offli

19、ne payments.Extensibility:Extensibility refers to the ability to add new functionality to a system.The CBDC system should have an extensible design,allowing PIPs and ESIPs to implement additional functionality without affecting user services.There are several factors to consider in designing an exte

20、nsible CBDC system,including using a composable architecture,which focuses on defining building blocks that can be combined to achieve the required functionality of the CBDC system.The Bank might also examine the implications of using open-source components,and any vulnerabilities that may arise due

21、 to third-party dependencies.Energy usage:The CBDC system should be energy efficient and designed in a way which minimises any impact on the environment.Therefore,Bank-managed CBDC infrastructure Page 5 would,at the very least,need to be as energy efficient as existing payment infrastructures.The Ba

22、nk will evaluate the CBDC architecture for opportunities to optimise energy efficiency.The paper sets out an illustrative conceptual model,which is based on the platform model of CBDC.The conceptual model includes a number of different components,including the core ledger,analytics,alias service and

23、 API layer.This paper outlines how these components might operate and assesses some of the ways that ecosystem participants the Bank,PIPs,ESIPs,and users would interact with these components.This includes the devices and payments a CBDC might need to enable,as well as interoperability,programmabilit

24、y and offline payments.Core ledger:The core ledger would provide the minimum necessary functionality for CBDC,and must meet the Banks performance,resilience and privacy requirements,while maintaining consistency at all times.Distributed ledger technologies and blockchain-based solutions might have a

25、dvantages in guaranteeing consistency and resilience,but they also present privacy,scalability and security challenges.Centrally governed,distributed database technologies might achieve the ledger requirements without such limitations.Therefore,these technologies might be appropriate for the core le

26、dger design.Analytics:The Bank may need to collect operational metadata for analysis of system status and performance.This would allow the Bank to maintain the core ledger and the API layer.The Bank could also collect aggregate data,subject to effective anonymisation and privacy protections,in order

27、 to undertake economic and policy analysis.These analytics would take place in a data platform,away from the core systems,and would not involve the collection or analysis of personal data.Alias service:The alias service would manage the range of different identifiers that might be used to route tran

28、sactions between users.The CBDC system might also use aliases to interoperate with existing payment infrastructures.This would allow users to choose between using well-known aliases and disposable aliases.In addition to enabling interoperability,aliases would also conceal the core wallet identifier.

29、The initial alias design might include phone numbers,a primary account number(PAN),account number and sort code,and wallet aliases.API layer:The API layer would allow PIPs and ESIPs to access core ledger functionality in order to offer services to users.The API layer would include an API gateway,whi

30、ch is an entry point for API calls,and an API service,which would implement the core functionality.There are several matters to consider in designing this,including using security controls to prevent denial of service attacks and implementing authentication or authorisation functionality in a standa

31、rdised manner.API specifications might standardise data and information exchange by orchestrating CBDC payment flows.Page 6 Devices and payments:CBDC should be widely available and accepted in-store,online and peer-to-peer.Users should be able to make and receive payments using smart devices,smart c

32、ards,ecommerce websites and applications,and existing point-of-sale technologies.The Bank would need to establish standards to ensure a consistent minimum level of functionality and security.User balances would be recorded on the core ledger,but it might be necessary to store some balances locally t

33、o support offline payments.PIPs and ESIPs would carry out user authentication.Interoperability:CBDC would be interoperable,allowing conversion between CBDC and other forms of money,particularly cash and bank deposits.Subject to further evaluation and taking account of wider developments,this might b

34、e enabled through utilising existing payment infrastructure,such as Faster Payments System,New Payments Architecture or LINK.Further integrations might be added later to support specific payment or settlement needs.Programmability:The Bank will not pursue central bank-initiated programmable function

35、s.This means that the Bank will not program CBDC to restrict its use.But PIPs could,with user consent,implement programmability features which are designed to give users greater functionality from their wallets and CBDC holdings.These could include automated payments or programmable wallets.The CBDC

36、 system might also enable a wide range of other programmable features,including payment-versus-payment,delivery-versus-payment and smart contract functionality,by implementing locking mechanisms,which PIPs and ESIPs can access through the API layer.Offline payments:The CBDC system might enable offli

37、ne payments.This could be useful in increasing system resilience in the event of network disruption.However,offline payments could also increase the risk of double spend,and create challenges in verifying the authenticity of funds.Additionally,offline payments could introduce complexities that affec

38、t system security and performance.The considerations raised in this paper will be examined further in the design phase.This paper represents our high-level approach to some of the key technology considerations and technical requirements for a UK CBDC.They will be examined further and adjusted iterat

39、ively during the next phase of our work.The Bank is seeking feedback on the matters presented in this paper,particularly on the specific questions outlined in Section 5.This will feed into our work on CBDC and ensure that feedback and challenge from stakeholders is taken into account at an early sta

40、ge of our technology work.Page 7 How to respond Written responses to any of the questions outlined in Section 5,or any other relevant observations,are requested by 7 June 2023.Please respond via this survey.If you have any comments or enquiries,please address them to:CBDC Unit Bank of England Thread

41、needle Street London EC2R 8AH CBDCbankofengland.co.uk Page 8 1:Introduction This Technology Working Paper(TWP)focuses on the technical requirements and design considerations related to a digital pound.By setting out,at an early stage,a high-level approach to key technology considerations,and by prop

42、osing an illustrative technology model,the Bank aims to generate feedback and challenge that can inform our future technology work.The digital pound Consultation Paper(CP)explains that although no final decision can be taken at this stage,the Bank of England(the Bank)and His Majestys Treasury(HM Tre

43、asury)judge that a digital pound(hereafter central bank digital currency(CBDC)is likely to be needed in the future,and the Bank and HM Treasury are proposing to accelerate work on its architecture.The digital pound CP is consulting on the policy objectives and high-level design for a UK CBDC.It sets

44、 out why there is a likely need for a CBDC,its implications for the Banks objectives of monetary and financial stability,the proposed public-private partnership to provide a CBDC,and the model of CBDC the Bank intends to examine further in the next stage of our work.This paper considers the technolo

45、gy implications of the Bank and HM Treasurys policy objectives for a UK CBDC,and the economic and functional design choices set out in the digital pound CP,using the platform model of CBDC outlined in that paper.This paper accompanies the digital pound consultation.This paper is not a consultative d

46、ocument as we are not making a decision on a specific proposition.Instead,it sets out the Banks early stage thinking on CBDC technology and seeks feedback on the potential approaches to important technology considerations.By setting out an illustrative conceptual model for a UK CBDC,which builds on

47、the platform model,this paper offers a basis for further discussion and exploration.We invite stakeholders and technology experts to provide feedback and challenge on the matters set out in this paper,including the specific questions listed in Section 5.Page 9 Figure 1:Overview of the digital pound

48、CP and the TWP The Banks thinking on the technology implications of CBDC will mature and evolve as our work develops.It is too early to take a decision on whether to build a UK CBDC.As such,it is not yet necessary to make firm decisions on any options for the architectural design or technology solut

49、ion for a UK CBDC.The Bank and HM Treasurys priority is to accelerate CBDC development work to be in a position to build a CBDC,in the event that a decision is made to do so.The functional requirements,technology considerations and illustrative technology model in this paper represent the Banks emer

50、ging thinking on these matters.The technology implications discussed are not exhaustive and will be tested and developed further in the next phase of work.Page 10 The Banks CBDC roadmap A UK CBDC would be a major project,involving distinct phases of work.Figure 2:Indicative CBDC roadmap The digital

51、pound CP and this TWP build on the Banks previous work on CBDC.In March 2020,the Bank published a Discussion Paper on CBDC.It outlined one possible approach to the design of a CBDC,referred to as the platform model.It also sought feedback from a wide range of stakeholder groups and in June 2021,the

52、Bank published a summary of the responses.In June 2021,the Bank set out possible opportunities and risks in a Discussion Paper on new forms of digital money.In March 2022,the Bank published a summary of the responses.Page 11 The digital pound CP and this TWP represent the conclusion of the research

53、and exploration phase of our work on CBDC.We will now move to the next stage,the design phase,to develop,in technology and policy terms,the CBDC model set out in the digital pound CP.The design phase will equip us to respond to developments in the payments landscape and reduce the lead time,were a d

54、ecision to be taken to build a CBDC in the future.This will involve investment in the Banks technology capabilities,an ambitious approach to the technology roadmap and extensive engagement with the private sector.By the end of the design phase,the Bank intends to have evaluated the technology feasib

55、ility of CBDC,determined the optimal design and technology architecture,and supported business model innovation through knowledge sharing and collaboration between the private and public sectors.Consistent with the Bank and HM Treasurys goal of accelerating the development of a UK CBDC and positioni

56、ng the authorities to respond to developments in the payments landscape,our aims for the design phase are to:cut lead-times on CBDC development and equip ourselves with the knowledge and capabilities to move into a build phase,if required;determine the technology feasibility and investment needed to

57、 build CBDC;articulate,in detail,what the technology and operational architecture for a UK CBDC would look like;assess and evaluate the benefits and costs of the CBDC architecture;deepen the Banks knowledge of CBDC technology and support stakeholder understanding of our technology approach;support t

58、he development of the broader UK digital currency technology industry through collaboration,knowledge-sharing,experimentation and proofs of concept;and provide the basis for a future decision on whether to introduce a CBDC and move to a build phase.Consistent with those aims,the design phase has two

59、 focus areas,both aiming to accelerate the development of a UK CBDC.The first objective of the design phase is to develop a comprehensive,conceptual architecture which can be used as the blueprint for construction of a UK CBDC,should we proceed to a build phase.This will require us to set out in det

60、ail the comprehensive and precise requirements for CBDC technology,the architecture and operating model,and high-level rules for participation in a CBDC ecosystem.This will allow stakeholders to understand the Banks approach to technology,requirements for technology solutions,and the commercial and

61、operational implications of a CBDC.Page 12 The second objective is experimentation and proofs of concept,in collaboration with private sector innovators,aims to inform the development of the CBDC architecture and build both the Bank,and the private sectors digital currency technology know-how.The Ba

62、nk will operate an open and transparent process for participation in proofs of concept and share the lessons learned from those experiments.The design phase will present opportunities for private sector business model innovation and support technology capability in the UK fintech sector.These are be

63、nefits we expect to endure even if we do not proceed to build a CBDC.The design phase will present benefits for the wider UK fintech community.Technologies for a CBDC are also relevant to privately issued digital money,like stablecoins.By partnering on proofs of concept and experiments,the Bank and

64、HM Treasury seek to catalyse private innovation in digital currency technologies,encourage innovative digital money business models and support knowledge sharing across the UK fintech sector.The design work will also benefit the Bank as supervisor of financial institutions that might seek to use suc

65、h technologies by helping us to better assess their implications for financial stability and the safety and soundness of PRA regulated firms.Given our expectation that digital currency technologies will be a significant area shaping the future of finance,the benefits of the design phase are expected

66、 to endure even if we do not build a CBDC.After the design phase,there will be a decision on whether to build a CBDC.On completion of the design phase,following further consultation and in light of the ongoing developments in the payments landscape,the Bank and the Government will decide whether to

67、build a CBDC.Work undertaken during the design phase will help to generate evidence to support a thorough evaluation of benefits and costs.If we decide to move into a build phase it would involve developing prototype(s)of CBDC technology in a simulated environment,before moving to pilot tests.A CBDC

68、 would only be launched if,among other things,it met all our exacting standards for security,resilience,and performance.A decision on whether to proceed to a build phase could be made around the middle of the decade.The second half of the decade is the earliest a UK CBDC might become operational.A C

69、BDC would be a major infrastructure project and would require significant investment.Any decision on whether to build one would require extensive evidence gathering,careful evaluation and comprehensive stakeholder engagement.The legal basis for a UK CBDC will be determined alongside consideration of

70、 its design.We judge that the second half of the decade is the earliest point at which a CBDC might be launched.It would take time to build infrastructure that is secure,resilient,and high performing.Experience from overseas digital currency projects,and from digital innovation Page 13 more generall

71、y,indicates that building user familiarity and understanding,and ensuring that innovative and customer friendly applications emerge,will be critical to success.We will engage stakeholders extensively and be transparent about our work.Transparency around our work,and engagement with a wide group of s

72、takeholders,will be more important than ever.This will build upon our approach to date,including our Engagement and Technology Forums.We will also continue engagement with civil society,academics,technologists,and businesses across the UK.Page 14 2:Functional requirements Figure 3:Overview of the TW

73、P functional requirements for a UK CBDC The Bank and HM Treasurys public policy objectives determine CBDC functionality and technology choices.The design of a UK CBDC must deliver the Government and Banks policy objectives.The digital pound CP sets out two public policy objectives:1 a)To sustain acc

74、ess to UK central bank money ensuring its role as an anchor for confidence and safety in our monetary system,and to underpin monetary and financial stability and sovereignty;and b)To promote innovation,choice,and efficiency in domestic payments as our lifestyles and economy become more digital.The p

75、latform model is the proposed model for CBDC.The digital pound CP proposes that a UK CBDC would be based on the platform model,as originally set out in the Banks 2020 Discussion Paper.In the platform model,the Bank would build a fast,secure,and resilient platform the core ledger which would provide

76、the minimum necessary functionality for a CBDC.Regulated private firms,Payment Interface Providers(PIPs)and External Service Interface Providers(ESIPs),could then access the core infrastructure via an application programming interface(API)layer.1 See Part D of the digital pound Consultation Paper.Pa

77、ge 15 Figure 4:The platform model The platform model is based on a public-private partnership.The platform model specifies the roles and responsibilities of the public and private sector in the provision of a CBDC.The Bank provides the core infrastructure upon which the private sector builds,innovat

78、es and delivers value-add services to households and businesses.Page 16 PIPs function as gateways to the CBDC ecosystem,offering users digital pass-through wallets2 to interact with,and manage,their CBDC holdings.ESIPs might provide non-payment,value-add services,such as business analytics,budgeting

79、 tools and fraud monitoring.We expect in-store,online and peer-to-peer(P2P)payments to be the initial focus of a UK CBDC.Over time,a broader range of payments may be enabled.The digital pound CP proposes that CBDC would be used by households and businesses for their everyday payment needs.As such,up

80、on introduction,the CBDC system would support two essential types of payments,person-to-business(P2B),both in-store and online,and P2P.Over the longer term,innovation and evolving user needs may mean a broader range of CBDC payment types could be offered.For example,offline and cross-border payments

81、 could support public policy objectives,but might take time to deliver given the technological and operational complexities involved.Batch,split,and micropayments are additional payment types that could help to support innovation and meet user needs.CBDC would be accessed via smart devices and cards

82、.The digital pound CP outlines how users would interact with their CBDC holdings.Users could access CBDC through wallets on smart devices.This means that they would be able to open a wallet using these devices,which would enable them to manage their balance and make payments.Smart devices might incl

83、ude smartphones,laptops,Internet of Things(IoT)devices and wearables.Not everyone has a smart device or finds it easy to use one,so users could also have physical card options for CBDC payments.It should be fast and easy to transfer between CBDC and other forms of money,including cash and bank depos

84、its.Households and businesses currently make payments using a mix of bank deposits and cash.It should be simple,fast and convenient to move between CBDC and other forms of money,particularly cash3 and bank deposits.A UK CBDC should implement economic design choices as set out in the digital pound CP

85、.The digital pound CP sets out economic design choices for a UK CBDC.Two of those choices have particular implications for technology:2 They are called pass-through wallets as the users holdings are recorded on the Banks core ledger,and the wallet simply passes instructions from the user to the core

86、 ledger.3 The physical nature of cash makes moving between it and other forms of money more challenging than digital money,but it is important that the aim remains to achieve simple,fast and convenient movement.This is likely to require working with existing cash distribution market participants.Pag

87、e 17 First,a UK CBDC would be subject to some limits on individuals holdings,at least during its introductory period.The technology design should support the implementation of these limits,including,if needed,the ability to change either the design or the level of any limit.Second,there may also nee

88、d to be restrictions on corporates holdings of CBDC.Given that corporates vary significantly in size,transaction volume and the activity they undertake,the design of corporate limits will be subject to further research.Technology solutions,such as balance sweeping,might have applications with respec

89、t to limits on corporate holdings by allowing corporates to freely receive CBDC payments,but preventing them from storing value in CBDC in a way which might be detrimental to financial stability by disintermediating critical money markets.CBDC could offer a broad range of functionalities and feature

90、s.Table A below summarises potential functionality and features of a CBDC discussed in the digital pound CP.Table A:Summary of CBDC functionality and features Categories Functionality and features Payment devices Smart devices and physical cards Existing online and in-store point-of-sale infrastruct

91、ure Internet of Things devices Wearables Wallet management Opening a wallet Viewing balances Payments Real-time one-off push Peer-to-peer Person-to-business(both in-store and online)Cross-border Offline Scheduled Micropayments Batch payments,eg wage Split Interoperability Moving between CBDC and oth

92、er forms of money,particularly cash and bank deposits Page 18 Categories Functionality and features Economic design Ability to implement limits policy Identity,data and privacy No access to users personal data by the Bank PIPs undertake know your customer checks and anti-money laundering(AML)complia

93、nce CBDC would not be anonymous Potential for users to have privacy controls on wallets Potential for tiered wallets based on ID information The payments use cases for CBDC are likely to evolve over time.There will need to be careful consideration of the ability to meet future payment needs which ex

94、tend beyond those covered in the table.Page 19 3:Technology design considerations Figure 5:Overview of the TWP Technology design considerations for a UK CBDC Technology design considerations are a useful way to organise and guide our work.In this section,we explore six technology design consideratio

95、ns which can help organise and guide our technology work.They will likely have significant impact on eventual CBDC design choices.While there are other technology considerations to be taken into account,the Bank considers that these six considerations are priorities and will provide a basis for test

96、ing architectures and solutions,and evaluating design trade-offs.These design considerations are:Privacy Security Resilience Performance Extensibility Energy usage Page 20 3.1:Privacy Summary Neither the Government nor the Bank would have access to users personal data.Privacy-enhancing technologies

97、might support privacy in the CBDC system while assisting PIPs in complying with legal and regulatory obligations.Understanding the application and feasibility of these technologies in supporting our policy objectives requires technology-agnostic evaluation and practical experimentation.Privacy is fu

98、ndamental to trust and confidence in the CBDC system.A UK CBDC would be designed to promote and protect privacy in accordance with users personal data rights.This is essential for user trust and confidence in the CBDC system.The CBDC system should implement data privacy by design while facilitating

99、compliance with all applicable laws and regulations.The digital pound CP proposes five design objectives related to privacy:4 Neither the Government nor the Bank would have access to users personal data except for law enforcement agencies under limited circumstances,prescribed in law,and on the same

100、 basis as currently with other digital payments.CBDC would not be anonymous because the ability to identify and verify users is needed to prevent financial crime and to meet applicable legal and regulatory obligations.Users should be able to choose from a range of wallet services.Varying levels of i

101、dentification would be accepted to ensure that CBDC is available for all.Users should be able to vary their privacy preferences to suit their privacy needs within the parameters set by law,the Bank and the Government,as part of system design.Enhanced privacy functionality could result in users secur

102、ing greater benefits from sharing their personal data.These design objectives inform possible technology requirements for privacy.A provisional set of possible requirements is set out in Table B.These requirements are mapped to principles of the UK General Data Protection Regulation.5 4 See Section

103、D.2 of the digital pound Consultation Paper.5 The Data Protection Act 2018;The principles.Page 21 Table B:Privacy technology requirements Privacy technology requirement Data protection principle Any information accessed by the Bank would have to be effectively anonymised off-ledger.6 Integrity and c

104、onfidentiality Personal data collected during user on-boarding and payment transactions should,by default,be limited to that required for those purposes.Users might choose to provide additional data in exchange for advanced services.Data minimisation Lawfulness,fairness and transparency Know your cu

105、stomer data collection processes should support integration with user identity services.7 Lawfulness,fairness and transparency PIP and ESIP access to transaction data within the CBDC system should be limited to the legal and regulatory minima,with users controlling their preferences.Lawfulness,fairn

106、ess and transparency Integrity and confidentiality Data minimisation Where PIPs and ESIPs need identity and payments data to be linked,their access to these data must be limited to the legal and regulatory minima.Integrity and confidentiality Data minimisation Lawfulness,fairness and transparency Pr

107、ivacy-enhancing technologies Privacy-enhancing technologies(PETs)show promise in enabling payment and data processing while minimising personal data exposure,and maximising security.The term PETs covers a broad range of technologies designed to support privacy and data protection.These technologies

108、may be cryptographic,statistical or procedural in nature.Since PETs enable a data privacy by design approach to data processing,they might support the policy objectives related to privacy.Further work is needed before any decision can be made on whether or not to use PETs.In the interim,the Bank has

109、 collated a non-exhaustive list of PETs which might have applications in a CBDC system.The merits and case for use of such PETs,along with others not listed here,will be assessed in the next phase of work.6 ICO(2021)How do we ensure anonymisation is effective?.7 HM Government(2016)Know your customer

110、 guidance;and HM Government(2021)UK digital identity and attributes trust framework.Page 22 a)Data minimisation Data minimisation techniques could give users better control of their data,enabling them to choose which data they share with PIPs and ESIPs.Some techniques include:Pseudonymisation,which

111、is a procedure that removes information that identifies an individual and replaces it with pseudonyms.Proposed amendments to current data protection legislation require that the pseudonymised data be kept separately from identifying data.Pseudonymisation might be used by PIPs and,in some cases,ESIPs

112、,to protect user personal data in storage and transit.Private information retri.In this paper,the alias service is shown as part of the Bank-managed infrastructure.This is primarily to allow the routing of message requests between PIPs and to reduce alias collision.However,it may be possible to distribute this

328、functionality across the ecosystem.The alias service would be designed to ensure privacy and user control of personal data.The alias service would be designed to ensure privacy,in line with the Bank and HM Treasurys objectives for CBDC.One way to ensure that the alias service would not access person

329、al information could be to only store a one-way hash of the alias.The hash value would then be used by PIPs to look up the wallet and PIP responsible for that wallet in order to make the subsequent payment.Privacy is an essential feature for users,but there are times when users may not wish to be pr

330、ivate,for example when paying friends and family.Users may also want to allow trusted 31 See Section D.3 of the digital pound Consultation Paper.Page 55 people to save their wallet details so they can be paid again in the future.PIPs,rather than the Bank,would be responsible for implementing user-pr

331、ivacy preferences of this sort.To meet these requirements,a CBDC might have both a well-known and a disposable alias.A well-known alias changes rarely and is something the wallet holder is happy to be shared with,and stored by,third parties.For example,users may choose to link their mobile phone num

332、bers to their wallets so that a messaging service might use their phone numbers to facilitate CBDC payments.A disposable alias,as the name suggests,is used for a short period of time.It is useful where a user wants to be able to conduct a transaction in private and not allow the recipient a record o

333、f their identity.For example,when buying groceries or coffee,users may elect to use a disposable alias.Disposable aliases would constantly change,so they may need to be recycled or archived after an appropriate amount of time to reduce the volume of information stored in the alias service.As increased volume could slow the performance of the alias service,managing the scaling and recycling of alia