The Bank for International Settlements (BIS) Innovation Hub Swiss Centre, supported by the Swiss National Bank (SNB), has undertaken Project Tourbillon, a comprehensive initiative exploring the viability of a retail central bank digital currency (CBDC). The findings, detailed in a report released in November 2023, highlight the potential for implementing a CBDC design that prioritizes payer anonymity while ensuring scalability and security.
The project, in progress since late 2022, focused on developing and testing two CBDC prototypes based on the eCash design by renowned computer scientist David Chaum. The prototypes aimed to address three key features simultaneously: privacy through payer anonymity, security utilizing quantum-safe cryptography (QSC), and scalability by testing the systems’ ability to handle a growing number of transactions.
Project Tourbillon operated within the existing two-tier banking system, involving four parties: a central bank, commercial banks, consumers, and merchants. The experimentation successfully demonstrated the feasibility of developing an anonymous, secure, and scalable retail CBDC.
Consumers and merchants were provided with deposit accounts, while banks were equipped with reserve accounts at the central bank. The Tourbillon apps, designed for both consumers and merchants, facilitated transactions and interactions within the CBDC ecosystem.
Despite successful completion, the project identified three critical areas for further development. Firstly, challenges in implementing QSC highlighted the need for research to enhance functionality and efficiency while ensuring a safe transition from current cryptography. Secondly, the report acknowledged the potential for improvement in privacy, security, and scalability, emphasizing the importance of modeling trade-offs between these elements. Lastly, future work should explore additional use cases, such as offline payments, and assess economic viability with a sustainable business model.
Project Tourbillon follows other BIS-led CBDC initiatives, including Project Mariana, Project Jura, and Project Helvetia. The Swiss National Bank has recently initiated a pilot project on the SIX Digital Exchange (SDX) based on the findings of Project Helvetia, allowing real bond transactions to be settled using a wholesale CBDC (wCBDC) from December 2023 to June 2024. Despite these advancements, the SNB clarifies that these initiatives do not constitute a commitment to introducing wholesale CBDC on a permanent basis.
