The ECB’s “novel new concept” aims to bridge two clashing forces in the digitized payments landscape: Europeans’ desire for private transactions and regulators’ demand for anti-money-laundering (AML) enforcement.
The European Central Bank (ECB) is thinking through the logistics of a hypothetical central bank digital currency (CBDC).
Revealed Tuesday in an ECB report, Europe’s central bankers have developed an “anonymity voucher” to give prospective CBDC users limited privacy in their retail transactions.
“The ongoing digitalisation of the economy represents a major challenge for the payments ecosystem, requiring that a balance be struck between allowing a certain degree of privacy in electronic payments and ensuring compliance with regulations aimed at tackling money laundering and the financing of terrorism (AML/CFT regulations)”, the report’s executive summary said.
The anonymity vouchers, issued to all account holders at a “regular interval” regardless of their account balances, could be redeemed on a one-to-one basis to shield their transactions, the report states.
Under the proposed system, if Alice wants to anonymously send CBDC tokens to Bob, Alice must hold the equivalent number of anonymity vouchers. The anonymized transactions would skip reviews from the ECB’s proposed AML Authority, the intermediary reviewing all transactions.
However, if Alice does not have enough vouchers she cannot send an anonymous transaction. The ECB said vouchers cannot be transferred between individuals, are “time-limited” and are released in limited batches by the AML Authority.
Anonymous vouchers, the report states, “are simply a technical tool used to limit the amount of CBDC that can be transferred anonymously. This means that limits on anonymous CBDC transfers can be enforced without recording the amount of CBDC that a user has spent, thereby protecting users’ privacy.”
Decentralized Employment Ecosystem Opolis to Integrate MakerDAO’s Dai Cryptocurrency
Opolis received a development grant from MakerDAO to integrate its Dai cryptocurrency into its decentralized employer ecosystem for payroll and benefits, the company said.
A blockchain-based answer to the gig-economy’s rise, Opolis is a professional employment organization (PEO) that, in part, plans to facilitate seamless cross-border payments with Dai.
“Opolis is offering the best solution we’ve seen yet that can provide the security and benefits usually restricted to traditional workplaces”, Head of Community Development for MakerDAO Richard Brown said in a statement announcing the partnership. “Maker is looking forward to seeing how Dai can help de-risk this emerging workforce”, Brown said.
In an interview with CoinDesk, John Paller, Opolis founder, explained how the broader efficiency gains are also supported by lower transaction costs for gig workers who work across borders.
“We’re partnering up to create a more streamlined system for international payroll remittance”, Paller said. “This would eliminate lots of different burdens and wait times and expensive fees in the traditional banking system.”
Guild members will use the stablecoin to stake their membership, unlock heath insurance, pay into retirement plans and automate tax compliance, among other benefits. They may choose to receive payment in Dai or in fiat.
MakerDAO’s grant supports the company’s plan to build a Decentralized Employment Organization (DEO), a web of employment services targeted at non-traditional employees.
Opolis caters to full-time workers whose gig-style employment lacks conventional health and insurance benefit packages. Ride-share drivers, freelance writers and graphic designers seldom receive health care through their contracted employers, but can pay into Opolis to unlock those same benefits, for example.
“What we’re really doing is democratizing and creating sustainable benevolence in these ecosystems”, Paller said.“The goal is to become an infrastructure service utility that average people use.”
Guild membership applications will open on Nov. 1, Opolis announced today.