Threshold Signatures for Central Bank Digital Currencies

TL;DR

This paper evaluates the use of threshold signature schemes (TSSs) for enhancing security in Central Bank Digital Currencies by analyzing their applicability, performance, and integration with existing CBDC solutions.

Contribution

It provides a detailed analysis of ECDSA-based TSSs in the context of CBDCs, including performance metrics and practical considerations for deployment.

Findings

TSS can improve security of CBDC transactions.

Performance evaluation shows acceptable latency and throughput.

ECDSA-based TSSs are feasible for real-world CBDC systems.

Abstract

Digital signatures are crucial for securing Central Bank Digital Currencies (CBDCs) transactions. Like most forms of digital currencies, CBDC solutions rely on signatures for transaction authenticity and integrity, leading to major issues in the case of private key compromise. Our work explores threshold signature schemes (TSSs) in the context of CBDCs. TSSs allow distributed key management and signing, reducing the risk of a compromised key. We analyze CBDC-specific requirements, considering the applicability of TSSs, and use Filia CBDC solution as a base for a detailed evaluation. As most of the current solutions rely on ECDSA for compatibility, we focus on ECDSA-based TSSs and their supporting libraries. Our performance evaluation measured the computational and communication complexity across key processes, as well as the throughput and latency of end-to-end transactions. The results confirm that TSS can enhance the security of CBDC implementations while maintaining acceptable performance for real-world deployments.