Paper 2023/1908

PARScoin: A Privacy-preserving, Auditable, and Regulation-friendly Stablecoin

Amirreza Sarencheh, The University of Edinburgh, IOG
Aggelos Kiayias, The University of Edinburgh, IOG
Markulf Kohlweiss, The University of Edinburgh, IOG
Abstract

Stablecoins are digital assets designed to maintain a consistent value relative to a reference point, serving as a vital component in Blockchain and Decentralized Finance (DeFi) ecosystems. Typical implementations of stablecoins via smart contracts come with important downsides such as a questionable level of privacy, potentially high fees, and lack of scalability. We put forth a new design, PARScoin, for a Privacy-preserving, Auditable, and Regulation-friendly Stablecoin that mitigates these issues while enabling high performance both in terms of speed of settlement and scalability. PARScoin enables privacy-preserving transactions where user identities, transaction values, and links to past transactions are hidden. Our system ensures auditability and regulation-friendliness without compromising privacy. Transfers do not need to be settled on blockchains, allowing for blockchain-independent fees. The system is blockchain-agnostic and interoperable with multiple blockchains via standard smart contract-based withdrawals. Our construction is distributed using threshold cryptography, avoiding single point of trust and failure, and is analyzed in the Universal Composition (UC) framework for secure integration with other systems. PARScoin supports self-custody, avoiding restrictions like address blacklisting or coin destruction, and demonstrates real-world efficiency based on our performance analysis.

Metadata
Available format(s)
PDF
Category
Applications
Publication info
Published elsewhere. Minor revision. 23rd International Conference on Cryptology And Network Security (CANS 2024)
Keywords
StablecoinPrivacyRegulationAuditingDeFiCryptographyTransaction FeeScalabilityUniversal Composition
Contact author(s)
Amirreza Sarencheh @ ed ac uk
Aggelos Kiayias @ ed ac uk
Markulf Kohlweiss @ ed ac uk
History
2025-01-21: last of 3 revisions
2023-12-12: received
See all versions
Short URL
https://ia.cr/2023/1908
License
Creative Commons Attribution
CC BY

BibTeX

@misc{cryptoeprint:2023/1908,
      author = {Amirreza Sarencheh and Aggelos Kiayias and Markulf Kohlweiss},
      title = {{PARScoin}: A Privacy-preserving, Auditable, and Regulation-friendly Stablecoin},
      howpublished = {Cryptology {ePrint} Archive, Paper 2023/1908},
      year = {2023},
      url = {https://eprint.iacr.org/2023/1908}
}
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