Perspectives on Objectives and Design Principles in Offline Payments with Central Bank Digital Currency

In this work, fundamental design principles for a central bank digital currency (CBDC) with offline functionality and corresponding countermeasures are discussed. We identify three major objectives relevant for core security and privacy properties of such CBDC proposals: (i) Access Control Security—protection of a user’s funds against unauthorized access by other users; (ii) Security against Depositor Misbehavior—preservation of the integrity of an environment (potentially the wallet) against misbehavior of its owner (for example, double-spending); (iii) Privacy by Design—ensuring privacy is embedded into the system architecture. Our central conclusion is based on the alignment of the objectives to concrete design elements as countermeasures; certain objectives and countermeasures have no or minimal interference with each other. A major consequence of our work is that the integrity of a user’s wallet and, accordingly, the mitigation of double-spending race attacks should be addressed through the adaptation and integration of secure hardware or functionally equivalent trusted execution mechanisms within a CBDC system. The developed framework is applied for the analysis of five academic proposals of payment systems.