Objectives and Design Principles in Offline Payments with Central Bank Digital Currency (CBDC)

In this work, fundamental design principles for a central bank digital currency (CBDC) with an offline functionality and corresponding counter measures are discussed. We identify three major objectives for any such CBDC proposal:(i) Access Control Security - protection of a user’s funds against unauthorized access by other users; (ii) Security against Depositor’s Misbehavior - preservation of the integrity of an environment (potentially the wallet) against misbehavior of its owner (for example, double-spending), and (iii) Privacy by Design - ensuring privacy is embedded into the system architecture. Our central conclusion is the alignment of the objectives to concrete design elements as countermeasures, whereas certain objectives and countermeasures have no or minimal interferences with each other. For example, we work out that the integrity of a user’s wallet and, accordingly, the prevention of double-spending race attacks should be addressed through the adoption and integration of $\mathit{\text{secure}}\mathit{\text{hardware}}$ within a CBDC system.