SEACEN-Visa Online Seminars on Central Bank Digital Currencies (CBDCs) are designed for the benefits of SEACEN’s stakeholders to explore various topics and issues relating to CBDCs.
Specifically, on Tuesday, April 6 at 9am MYT, authors of the paper Towards a Two-Tier Hierarchical Infrastructure: An Offline Payment System for Central Bank Digital Currencies will present their paper; and on Thursday, April 8 at 9am MYT, we will host a CBDC Roundtable Policy Discussion to discuss issues and challenges of CBDC and Regulatory Goals.
Digital payments traditionally rely on online communications with several intermediaries such as banks, payment networks, and payment processors in order to authorize and process payment transactions. While these communication networks are designed to be highly available with continuous uptime, there may be times when an end-user experiences little or no access to network connectivity.
The growing interest in digital forms of payments has led central banks around the world to explore the possibility of issuing a new type of central-bank money, known as central bank digital currency (CBDC). To facilitate the secure issuance and transfer of CBDC, we envision a CBDC design under a two-tier hierarchical trust infrastructure, which is implemented using public-key cryptography with the central bank as the root certificate authority for generating digital signatures, and other financial institutions as intermediate certificate authorities. One important design feature for CBDC that can be developed under this hierarchical trust infrastructure is an “online” capability to create secure point-to-point online payments through the use of authorized hardware. An online capability for CBDC as digital cash can create a resilient payment system for consumers and businesses to transact in any situation.
In this paper, we propose an online payment system (OPS) protocol for CBDC that allows a user to make digital payments to another user while both users are temporarily online and unable to connect to payment intermediaries (or even the Internet). OPS can be used to instantly complete a transaction involving any form of digital currency over a point-to-point channel without communicating with any payment intermediary, achieving virtually unbounded throughput and real-time transaction latency.
One needs to ensure funds cannot be double-spent during online payments as no trusted intermediary is present in the payment loop to protect against replay of payment transactions. Our OPS protocol prevents double-spending by relying on digital signatures generated by trusted execution environments (TEEs) which are already available on most computer devices, including smartphones and tablets. While a TEE brings the primary point of trust to an online device, an OPS system requires several cryptographic protocols to enable the secure exchange of funds between multiple TEE-enabled devices, and hence a reliable financial ecosystem that can securely support CBDC at scale.
Mark McKenzie – Senior Financial Sector Specialist – SEACEN Centre
Dr. Mihai Christodorescu joined Visa Research as a Principal Research Scientist in 2017, and shortly thereafter was promoted to Sr. Director in 2018, where he is leading a team in fundamental and applied research in a number of security areas, including advanced cryptography, secure multi-party computation (MPC), post-quantum cryptography (PQC), secure systems, and more. Prior to joining Visa, Mihai was a Senior Researcher at Qualcomm Research Silicon Valley. Before joining Qualcomm, he was a Research Staff Member at IBM, and he also worked as a Principal Scientist at Securitas Technologies, Inc. His previous work focused on internet-scale security analysis of networks, systems and software, and whole-system security hardening for both cloud and mobile endpoints. Full bio here.
Dr. Mahdi Zamani joined Visa Research as a Staff Research Scientist in November 2016. Mahdi received his Ph.D. in Computer Science from the University of New Mexico in 2016. His Ph.D. work focused on scalable and provably-secure distributed algorithms that can be used to perform multi-party computation and anonymous communication efficiently in large networks. Prior to joining Visa, Mahdi was a postdoctoral researcher at Yale University, working on secure distributed algorithms for anonymous communication and multi-party computation. Full bio here.
Catherine Gu is the Global CBDC product lead at Visa, leading the global fintech product effort in central bank digital currencies. Prior to Visa, Catherine had four years of quantitative finance experience from J.P. Morgan and Man Group, and two years of research in stablecoins and decentralized finance while studying at Stanford University with Professor Dan Boneh, a leading expert in cryptography and computer security. Catherine graduated with M.S. in Management Science and Engineering from Stanford University, and B.A. and M. Phil in Economics from the University of Cambridge.
Erin English has over fifteen years of experience in cybersecurity, financial crime analysis, and technology policy. He was most recently a Senior Security Strategist at Microsoft, where he helped drive the public policy side of the company’s cybersecurity, cloud, and blockchain strategies. Erin previously served for the better part of a decade in the U.S. Department of Treasury in the Office of Terrorism and Financial Intelligence, and as the Department’s Financial Attaché in Pakistan during the global financial crisis. Prior to his work in Treasury, Erin worked in the Defense Intelligence Agency and as an officer in the Army. Erin holds a master’s degree from the Fletcher School of Law and Diplomacy at Tufts University and a bachelor’s degree in history from the U.S. Military Academy at West Point.
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