Cryptology ePrint Archive: Report 2018/412

PRCash: Centrally-Issued Digital Currency with Privacy and Regulation

Karl Wüst and Kari Kostiainen and Vedran Capkun and Srdjan Capkun

Abstract: Decentralized cryptocurrencies based on blockchains provide attractive features, including user privacy and system transparency, but lack active control of money supply and capabilities for regulatory oversight, both existing features of modern monetary systems. These limitations are critical, especially if the cryptocurrency is to replace, or complement, existing fiat currencies. Centralized cryptocurrencies, on the other hand, provide controlled supply of money, but lack transparency and transferability. Finally, they provide only limited privacy guarantees, as they do not offer recipient anonymity or payment value secrecy. We propose a novel digital currency, called PRCash, where the control of money supply is centralized, money is represented as value-hiding transactions for transferability and improved privacy, and transactions are verified in a distributed manner and published to a public ledger for verifiability and transparency. Strong privacy and regulation are seemingly conflicting features, but we overcome this technical problem with a new regulation mechanism based on zero-knowledge proofs. Our implementation and evaluation shows that payments are fast and large-scale deployments practical. PRCash is the first digital currency to provide control of money supply, transparency, regulation, and privacy at the same time, and thus make its adoption as a fiat currency feasible.

Category / Keywords: applications / Cryptocurrency, Blockchain, Privacy, Regulation, Zero Knowledge

Date: received 3 May 2018

Contact author: karl wuest at inf ethz ch

Available format(s): PDF | BibTeX Citation

Version: 20180510:202943 (All versions of this report)

Short URL: ia.cr/2018/412


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