Privacy and Transparency in CBDCs: A Regulation-by-Design AML/CFT Scheme

8 Pages Posted: 10 Mar 2021

See all articles by Nadia Pocher

Nadia Pocher

Autonomous University of Barcelona; KU Leuven, Centre for IT & IP Law (CiTiP), Students; Università di Bologna - CIRSFID - Interdepartmental Research Center in the History of Law, Philosophy and Sociology of Law and Juridical Informatics

Andreas Veneris

University of Toronto - Department of Electrical and Computer Engineering, and Department of Computer Science

Date Written: January 3, 2021

Abstract

Central banks and governments all over the world are increasingly exploring digital versions of fiat money, known as retail Central Bank Digital Currencies (CBDCs). Most initiatives rely on Distributed Ledger Technologies and are presented as alternatives to physical cash. Consequently, anonymity-related regulatory questions arise in terms of Anti-Money Laundering and Counter-Terrorist Financing compliance. Against this backdrop, this paper provides a techno-legal taxonomy of approaches to balance privacy and transparency in CBDCs without thwarting accountability, but it also underlines cross-sectoral impacts. The contribution heeds regulation-by-design as its core methodological foundation, with Privacy-Enhancing Technologies as the relevant use case. Thus, it highlights that not only technology aids legal purposes, but also that some regulatory requirements ought to be designed into technology for one to reach agreed upon results and/or standards.

Keywords: central bank digital currency, cryptocurrency, regulation, policy, anonymity, criminal activities, risk management, law and technology, anti-money laundering, compliance

Suggested Citation

Pocher, Nadia and Veneris, Andreas, Privacy and Transparency in CBDCs: A Regulation-by-Design AML/CFT Scheme (January 3, 2021). Available at SSRN: https://ssrn.com/abstract=3759144 or http://dx.doi.org/10.2139/ssrn.3759144

Nadia Pocher (Contact Author)

Autonomous University of Barcelona ( email )

Plaça Cívica
Cerdañola del Valles
Barcelona, Barcelona 08193
Spain

KU Leuven, Centre for IT & IP Law (CiTiP), Students ( email )

Sint-Michielsstraat 6 box 3443
Leuven
Belgium

Università di Bologna - CIRSFID - Interdepartmental Research Center in the History of Law, Philosophy and Sociology of Law and Juridical Informatics ( email )

Bologna
Italy

Andreas Veneris

University of Toronto - Department of Electrical and Computer Engineering, and Department of Computer Science ( email )

10 King's College Rd,
Toronto, Ontario M5S 3G4
Canada

HOME PAGE: http://https://www.eecg.utoronto.ca/~veneris/AndreasVeneris.htm

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