This post was originally published on Finextra (Security)
Offline payment functionality is technically feasible for a future digital pound but there are trade-offs that make it challenging, according to new Bank of England research.
Editorial
This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.
As it continues the design phase of its multi-year preparatory work on a potential digital pound, the central bank has brought in Thales, Secretarium, Idemia Secure Transactions, Quali-Sign and Consult Hyperion to assess the feasibility of offline functionality.
Offline payments occur while neither payer nor payee has access to the central bank digital currency network, usually due to the lack of an internet connection. The potential benefits include resilience in the face of outages and financial inclusion.
The bank has found that “while it might be technically feasible to implement an offline payment functionality for a digital pound, there are trade-offs, particularly around user experience and preventing double spending and counterfeiting, that make implementing it challenging”.
The heavy reliance on secure elements for offline mean that if they were breached, double spending and counterfeiting might occur. While secure elements are commonly used in payments, they are, in most cases, paired with immediate online authentication. In
— Read the rest of this post, which was originally published on Finextra (Security).
