sa

1 files changed, 51 insertions, 15 deletions

diff --git a/sa/sa.tex b/sa/sa.tex
index 5f62480..e87b199 100644
--- a/sa/sa.tex
+++ b/sa/sa.tex
@@ -21,12 +21,6 @@
 
 \medskip
 
-% \begin{tabular}{l l}
-% Project Acronym 	& LAC - Latent Anonymous Commons  (LAKE) \\
-% Principal Investigator	& Jeffrey Burdges \\
-% Host Institution	& University of Luxembourg \\
-% Main Partner     	& pEp SA \\
-% \end{tabular}
 \end{center}
 
 \def\red{}  % FIXME
@@ -39,9 +33,10 @@ broadly fits the requirements of SARB's CBDC project.  Taler is an electronic
 payment system with focus on security, efficiency and data minimization.
 Cryptography is employed for security.  While Taler includes privacy features,
 it can at the same time guarantee that cash flows to merchants/retailers are
-transparent for AML and other financial auditing requirements.  Transactions
-with Taler are fast and can execute in one network round-trip time. Taler is
-economically viable for micro-payments (payments of 1 cent).
+transparent for anti money laundering (AML) and know-your-customer (KYC)
+auditing requirements.  Transactions with Taler are fast and can execute in
+one network round-trip time. Taler is economically viable for micro-payments
+(payments of 1 cent).
 
 The USPs of Taler are:
 
@@ -272,17 +267,36 @@ policy positions in future.}
 \item
 {\bf It must enable immediate person-to-person transfer of value without clearing and
   settlement in today’s terms.}
+  Taler enables offline person-to-person transfers without the involvement of third parties
+  only if those individuals form an economic union, that is trust each other to
+  behave honestly. Basically, such transfers are not transactions in that the sender
+  can spend the money elsewhere at any time.
 
+  Online person-to-person transfers are possible, but involve at least the exchange
+  as a service provider to protect against double spending.  In this case, the receiver
+  also must have an account that satisfies KYC requirements at the exchange to prevent
+  money laundering.
 \item
 {\bf It must be possible to set limits for CBDC transaction values and to implement
-graduated regulation depending on transaction value.}
+  graduated regulation depending on transaction value.}
+  Taler can impose withdrawal limits for consumers, and merchants may be required to
+  limit the value of individual transactions or to provide additional identification
+  of customers based on the specific product being sold or the value of the transaction.
+  Taler provides an audit trail for the state to ensure merchants comply with
+  applicable regulation on transactions.
 \item
 {\bf CBDC payment products should enable transaction notifications to consumers.}
   Customers and merchants always have access to their full account
   histories and their balances on their local computer.
 \item
 {\bf CBDC must be accepted and usable at all levels of transactions, in the same way
-cash is accepted and usable at all levels of transactions.}
+  cash is accepted and usable at all levels of transactions.}
+  Taler is in principle suitable for microtransactions as well as very large
+  transactions, however the system assumes that the consumer is under control
+  of their computing resources. Given the state of security on mobile phones,
+  it may thus not be generally advisable to carry very large balances on a
+  mobile phone.  However, it is in principle possible to produce hardware
+  security modules to pay larger amounts with adequate security.
 \item
 {\bf CBDC must provide real-time, final and irrefutable transfer of value.}
 Taler payments typically clear in one network RTT, concluding with
@@ -298,7 +312,8 @@ data once online.}
   communicate with the exchange.  Otherwise the merchant cannot be sure that the payer
   did not double-spend and risks being defrauded.
 \item
-{\bf The government must be able to make payments in CBDC.}
+  {\bf The government must be able to make payments in CBDC.}
+  This is possible with Taler.
 \item
 {\bf Interoperability principles must enable CBDC to be used at all levels throughout the
 payment system.}
@@ -330,7 +345,16 @@ payment system.}
 
 \item
 {\bf Auditability of transactions should be parameterised in order to determine the balance
-between anonymity of the transacting parties and traceability of funds transfers.}
+  between anonymity of the transacting parties and traceability of funds transfers.}
+  Taler generally is setup to protect the privacy of consumers (who spend money)
+  and to provide full accountability for merchants (who receive money).  Consumers
+  of course still have to authenticate when withdrawing funds.  For particular
+  transactions (such as sale of weapons, drugs, chemicals or high-value goods) merchants may
+  be required by law to identify the buyer (and possibly perform additional checks).
+  Taler does not assist merchants with this per-se, but by providing an electronic trail
+  from the Taler transaction to the business contract of the merchant, Taler makes it
+  easy for law enforcement to verify that merchants have complied with applicable regulation
+  on identifying customers for critical transactions.
 \item
 {\bf It must be possible to issue a consumer with a ‘proof of payment’ from transaction
   audit trails.}
@@ -435,8 +459,16 @@ holdings, without requiring input from the consumer.
 
 \subsection{Participation in similar initiatives or projects}
 
-Mention ECB, SNB, Riksbank consultations, and cooperation with German bank
-on real-world deployment.
+We have been involved in consultations with the Swiss National Bank, the
+European Central Bank, and the Swedish Riksbank as all three were interested
+in Taler in their respective CBDC initiatives. However, none of them is yet at
+the point where the respective central banks have made any commitments for any
+particular direction or technical solution.
+
+We are also working with the German GLS Bank on a commercial deployment of
+GNU Taler and expect the technical integration with their banking platform
+to be concluded later this year.
+
 
 \subsection{Experience and skill set offered by the subject matter experts}
 %
@@ -460,6 +492,10 @@ We are also surprised that privacy for citizens using the system is
 not listed as a principle objective and urge the SARB to consider
 adding privacy considerations to their requirements.
 
+Similarly, we hope that SARB understands the value of a Free Software solution
+in that it preserves SA's independence from particular vendors.  Furthermore,
+open standards and public source code enhance public verifiability and thus
+the public's trust in the solution.
 
 \section{Proposed approach and methodology}