NEXTGENERATIONINTERNETNGI TALER & The Digital Euro
Christian GrothoffNGI TALER

28.05.2024

What is Taler?
https://taler.net/en/features.html
Taler is▶ a Free/Libre software payment system infrastructure project▶ ... with a surrounding software ecosystem▶ ... and a consortium (NGI TALER) and community that wants todeploy it as widely as possible.
However, Taler is▶ not a currency or speculative asset▶ not a long-term store of value▶ not a network or instance of a system▶ not decentralized▶ not based on proof-of-work or proof-of-stake
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2NGI TALER partners

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Design principles
https://taler.net/en/principles.html
GNU Taler must ...
1. ... be implemented as free software.
2. ... protect the privacy of buyers.
3. ... enable the state to tax income and crack down on illegal businessactivities.
4. ... prevent payment fraud.
5. ... only disclose the minimal amount of information necessary.
6. ... be usable.
7. ... be efficient.
8. ... avoid single points of failure.
9. ... foster competition.
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Architecture of Taler

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GNU Taler vs. Digital Euro
Fundamentals
GNU Taler:

Digital Euro:▶ Payment with one-timetokens▶ Cryptographic privacyfor payer▶ Suitable for children,
tourists, ...
▶ Free and Open Source▶ Payment using bankaccounts▶ Privacy by policy,
linkable payments▶ Requires ability to open
bank account▶ ECB proprietary▶ Deployed by community▶ “Moving target”

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GNU Taler vs. Digital EuroUsability
GNU Taler:

Digital Euro:▶ Self-custody▶ Account-based▶ Authorize locally▶ Authenticate to provider▶ One-click▶ Multi-factor▶ 6+ platforms today▶ FAANG-only?

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GNU Taler vs. Digital EuroUse-cases
GNU Taler:

Digital Euro:▶ Traditional payments▶ Traditional payments▶ Micropayments▶ -▶ IoT payments▶ -▶ Non-fiat currencies▶ Only Euros▶ Other assets▶ -⇒ New type of service⇒ Replacement service

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Digital Euro
Dangerous decisions▶ Offline requirement assumes copy-protection unbreakable by NSA& FSB▶ Waterfall link to bank account implies compromise of Digital Euro
account also compromises linked bank accounts▶ Lack of privacy enables “absolute control” of central bank overprivate finances▶ Direct competition for bank accounts and traditional payment
services disrupts banking sector financial stability▶ Non-FLOSS solution limits interoperability and international
adoption

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Endgame
Risk management

The ECB tender asks for redundant implementations of their design.

The design of a CBDC is the hardest problem, not the implementation.

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AcknowledgementsFunded by the European Union (Project 101135475).

Funded by SERI (HEU-Projekt 101135475-TALER).

Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union.
Neither the European Union nor the granting authority can be held responsible for them.

Christian Grothoff

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