From “absolute control” to zero-knowledge proofs: the BIS rewrites its CBDC sales pitch

The Bank for International Settlements (BIS) has published results from the second phase of Project Aurum.

The second phase of Project Aurum suggests that user privacy should rely on more than the central bank’s pledge not to look.

What does the Aurum prototype actually do?

The Bank for International Settlements (BIS) says Project Aurum Phase 2 is an early-stage test built on its earlier Aurum code. The BIS Innovation Hub developed it with the Hong Kong Monetary Authority and other institutions. It combines several privacy tools like encryption and zero-knowledge proofs, which let a payment be verified without revealing the names tied to the transaction or the amount.

Under the design, people would still sign up through their regular banks. Those banks will verify their identity and keep their records, without the central bank having access to any of that information.

Personal details will only be provided if the law demands it.

This is a notable shift in tone from 2020, when BIS general manager Agustín Carstens said a central bank digital currency (CBDC) would give the issuer “absolute control on the rules and regulations” governing its use.

He made the remark on an IMF panel, and conspiracy theorists later seized on it.

Why should privacy be enforced?

In August 2026, a European Central Bank board member, Piero Cipollone, said the planned digital euro would deliver the maximum level of privacy of any current technology, insisting the Eurosystem could not structurally link people to their transactions.

Civil society groups, including an Austrian digital rights organization called Epicenter.works, wrote a joint statement, warning that legislative promises regarding the digital euro can be reinterpreted or broken.

A research paper by Jeff Nijsse and Andrea Pinto looked at 20 CBDC projects and found that privacy features promised in early proposals usually get watered down by launch.

However, Project Aurum is yet to be released or used commercially.

The BIS report also admits that stronger privacy can make transactions slower, make programmable features harder to build, and make lost wallets difficult to recover.

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