BIS Innovation Hub's Swiss Centre has launched Tourbillon, a new project to improve cyber resilience, scalability, and privacy in a prototype Central Bank Digital Currency (CBDC). 

BIS aims to have the prototype ready by mid-2023, and it states that the results will be relevant both to the wholesale CBDC market as well as to the retail CBDC market. 

There are three core characteristics that regulators have identified as being essential for CBDCs. They are cyber resilience, scalability, and privacy, but their design involves a complex trade-off between all three elements. 

Using technologies such as blind signatures and mix networks, Project Tourbillon hopes to reconcile these tradeoffs with cryptography and CBDC design studies suggested by David Chaum, inventor of eCash and creator of xx network, and Thomas Moser, alternate member of the Swiss National Bank's Governing Board. 

Morten Bech, head of the BIS Innovation Hub Swiss Center, said, “Digital central bank money can make payments better and more inclusive. Yet, delivering a CBDC involves difficult trade-offs between cyber resilience, scalability, and user privacy. Project Tourbillon will build and test a prototype that reconciles these trade-offs and pushes central banks’ technological frontier.” 

This project will utilize a distributed ledger architecture but not be based on it for scalability. Each transaction will be treated separately to allow system resources to scale linearly. Through realistic parameters, linear scalability is verified. Tourbillon offers privacy to payment senders, but not to payment recipients. Regulators and compliance checks will continue.