Privacy Enhancing Technologies (PETs) in Central Bank Digital Currency (CBDC) – Master thesis
This topic is the right topic for you, if:
- You are interested in cryptocurrencies and want to work on a very related, but promising topic. ;)
- You are interested in finance and payment systems
- You are interested in researching how best to protect users privacy
Motivation:
Due to the decrease in cash use, the emergence of cryptocurrencies like Bitcoin and finally the introduction of private stablecoins like Libra, build by large organizations such as Facebook, central banks have started to conduct research on Central Bank Digital Currency (CBDC).
This digital, central bank issued currency can be account-based, like a traditional bank account, or token-based, build on a blockchain or a distributed ledger (DLT). The European Central Bank (ECB) is already conducting pilot projects with a digital E-Euro.
While central banks see many advantages in introducing a CBDC, this new payment method and system could have large implications for privacy and anonymity in payments of individuals or end-users of such a CBDC.
As the name suggests, Privacy Enhancing Technologies (PETs) are techniques to create or strengthen privacy in different technologies. Significant amounts of these technologies rely on cryptography. In cryptocurrencies and blockchain systems, technologies such as zero-knowledge proof (ZKN) have been used to create anonymous payment systems.
What is currently missing in academia is a framework or list to provide a comprehensive overview of these PETs for CBDC.
Goal:
The goal of this thesis is to create a comprehensive overview on PETs in the domain of CBDC. PETs should be clustered among their level of privacy protection and applicability with respect to different design choices that CBDC might exhibit.
Questions that this thesis might answer:
- What PETs have been used historically in payment systems?
- What PETs have been used in cryptocurrencies such as ZCash?
- What PETs have already been tested, or included, in current CBDC pilot projects by central banks?
- What level of privacy and anonymity could each PET ideally provide?
- How would a framework with PETs for CBDCs look like?
Helpful but not required Knowledge
- Knowledge on systematic literature reviews
- Fundamentals in privacy and PETs, ideally with a background on cryptography and informatics in general
- Fundamentals in cryptocurrency and payment systems, ideally due to programming experience in blockchain systems
What I can offer to you:
This topic is of personal interest to my and my PhD topic. You can expect to get a motivated thesis supervisor that is interested in the results of this thesis. Students can expect regular (online)-meetings, feedback and personal interest in their work. The concrete design and topic of the thesis may change, based on the students preferences, interests and strengths.
References as an introduction to the topic:
- ECB, 2019. "Exploring anonymity in payment". Available under: https://www.ecb.europa.eu/paym/intro/publications/pdf/ecb.mipinfocus191217.en.pdf
- undefined">Tronnier, Recker and Hamm, 2020. "Towards Central Bank Digital Currency". Pacific Asia Conference on Information Systems. Available under: https://aisel.aisnet.org/pacis2020/131 Asia Conference on Information Systems
Next steps:
This topic is open to students doing their master in FB2 and FB12 (business informatics).
Please contact me: Frederic Tronnier frederic.tronnier@m-chair.de with the specific topic and attach your current grades and research interests, as well as on your possible starting date.
