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

According to the BIS Innovation Hub, Project Aurum Phase 2 has been officially released. Built upon the existing Aurum codebase, this project develops a privacy-preserving digital cash prototype aimed at helping central banks and policymakers better understand how Privacy-Enhancing Technologies (PETs) can address the dilemma between privacy protection and regulatory compliance in digital cash systems. The prototype adheres to "Privacy by Design" and "Privacy by Default" principles, striking a balance between complete anonymity and full transparency while providing customizable features to meet compliance and operational requirements. The project emphasizes that privacy protection must be embedded directly into the digital cash architecture through technical measures, rather than relying solely on institutional safeguards, thereby minimizing the unnecessary exposure of personal and transaction data and preserving system integrity. The report also indicates that relevant features can be flexibly adjusted according to varying policy orientations and risk appetites, offering a reference for central banks when formulating policies in the digital payments sector. Concurrently, BIS recommends that central banks further investigate the application potential of PETs across broader scenarios.