Achieving anonymity despite being compliant

What’s clever about the solution is its novel approach to anti money laundering. It enables the payer and their transactions to remain anonymous, but not the recipient who has to hand over the CBDC to their bank.

That doesn’t mean the payer can use an illicit stash of money. Because the payer is issued the CBDC via their bank, which will have already conducted know your customer compliance.

Anonymity is achieved because when a bank issues the CBDC to their client, the bank doesn’t know the unique identity of the digital bank notes. It uses blind signatures. The analogy is that the consumer requests CHF 100 by putting the request with specific bank note numbers in an envelope. The bank doesn’t open the envelope but digitally signs the outside, enabling the issuance of the CBDC.

When the consumer pays a merchant using the notes, the merchant does not know the payer’s identity, similar to cash.