BIS: Digital Cash Offers Privacy but Is Not Production-Ready
The BIS said digital cash can offer “cash-like privacy,” but its Project Aurum prototype is not production-ready because bank breaches could expose customers’ personal data.
The Bank for International Settlements (BIS) said digital cash can provide privacy similar to physical cash, while warning that bank data breaches could expose users’ personal information.
The findings appeared in the BIS Project Aurum Phase 2 report, published Oct. 13, 2026. The project used the BIS’s existing Aurum codebase to create a prototype designed to balance user privacy with transaction oversight.
A breach at one bank could expose data belonging to that bank’s customers, but would not reveal the identities of customers connected to other counterparties, according to the report. A compromise of a validator alone would also not be enough to identify end users.
The report examines technical requirements for a privacy-preserving central bank digital currency (CBDC). It addresses concerns that CBDCs could give central banks or other authorities broad access to users’ financial activity.
The BIS described the prototype as demonstrating that digital cash can offer “cash-like privacy.” It added that the technology stack still has security risks and is not “production ready.”
Privacy concerns have also emerged in national CBDC projects. In 2023, Brazil’s central bank published the source code for its CBDC pilot. The code included mechanisms that could allow the central bank to freeze or reduce funds in users’ digital wallets.
In January 2026, U.S. President Donald Trump banned federal agencies from issuing a CBDC, citing financial stability and privacy concerns.
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