PayOff: A Regulated Central Bank Digital Currency with Private Offline Payments

Abstract

This research addresses technical challenges in designing a digital euro that supports offline payments while meeting regulatory requirements from the European Commission. The authors developed PayOff, a novel CBDC architecture that balances privacy protection with regulatory compliance features like holding limits and protections against secure element compromise. The system provides strong privacy for offline transactions while acknowledging that offline payment messages and storage requirements grow with the number of payments made without reconnecting, presenting trade-offs between usability and security.

Peer Review

Community peer review and discussion of this publication.