HaRBInger.md (3353B)
1 # Tokenised KYC 2 3 ## Brief description of the product or solution 4 5 We leverage the Swiss electronic ID (eID) to enable tokenized 6 Know-Your-Customer (KYC) for our rCBDC digital cash payment solution 7 for privacy-preserving and compliant peer-to-peer payments. 8 9 ## Innovation or novelty involved 10 11 By combining self-sovereign identity systems supporting selective 12 disclosure with digital cash, we enable highly efficient decentralized 13 payment systems with strong Verification of Payees (VoP) to minimize 14 fraud. The system exhibits the same fundamental properties and risk 15 characteristics as physical cash, and its FLOSS-based architecture 16 enables interoperable global deployments without raising sovereignty 17 concerns. 18 19 ## How is it different from existing product/ solutions available in the market 20 21 The proposed solution introduces peer-to-peer transactions with strong 22 VoP, a capability not currently available in the financial industry. 23 In most aspects, the system mirrors the functional properties of 24 physical cash and physical ID, with the added conveniences of using 25 digital technology. The wallets truly provide ownership and control 26 over data and money; they are not based on accounts. There is no 27 custodian, the citizens are directly in control over their identity 28 data and money. 29 30 ## Technology or platform being used 31 32 Our solution is based on two free and open source projects, GNU Taler 33 and the SSI-inspired Swiss eID solution. It primarily uses OID4VP, 34 OID4VCI, SD-JWT, OAUTH2 and blind signatures. For onboarding, Swiyu 35 relies on biometric facial identification. Wallets are available for 36 Android, iOS and other platforms. Where supported, hardware security 37 modules can be used to add an additional layer of protection for 38 sensitive data. For the (central) bank, a GNU/Linux system with a 39 Postgresql database is required. 40 41 ## Brief process flow (if possible) 42 43 1. Citizens obtain a Swiss electronic ID online (biometric identification). 44 2. For a payment, the payer generates a virtual check containing: 45 - An expiry date 46 - Required payee attributes for verification 47 3. The virtual check is transferred to the payee via NFC, QR code, or messaging channels; this may even happen offline. 48 4. The payee redeems the check after successful identity verification through selective disclosure of the requested attributes. 49 50 ## Proposed benefits and potential use cases 51 52 The following unique features have tremendous potential: 53 54 - Scalable onboarding based on national ID at low cost with high security 55 - Standards-compatible (EU, CH) with next-generation SSI-based e-ID 56 - Fraud-reduction via selective disclosure of payee identity to payer 57 - Micro-transactions: Taler enables transactions as small as 58 fractions of a cent. 59 - Bearer instruments for identity and digital cash: the 60 e-ID and payment wallets actually hold the identity data and 61 the actual money, akin to ID documents and physical cash, 62 reducing reliance on custodians improving reliability, 63 usability, privacy and security. 64 - Asymmetric anonymity was shown to improve welfare over 65 systems with two-sided anonymity or no privacy (Tinn 2024) 66 - Tokenization of diverse assets: Taler goes beyond currencies 67 and enables tokenization of other fungible assets. 68 69 # Any other details you may wish to highlight 70 71 - No dependency on blockchain, scalable low-energy solution.