arXiv subjects

Geoffrey Goodell

Publications and source records attributed to Geoffrey Goodell.

At least 19 recordsLinked to original sources

arXiv2026

Protocol-Embedded Compliance for Privacy-Preserving, Non-Custodial Digital Payments

Received wisdom on payments infrastructure strongly supports the custodial, account-based model as a necessity for transaction integrity, auditability and verification; the set of fundamental primitives for regulated digital money exchange, the argument goes, necessitates designated identifiable entities that store and process credentials, perform KYC, and ultimately act as the 'single version of the truth' for compliance remediation and, most important, AML. In this paper, we propose this is not the case, by arguing that non-custodial, cash-like digital assets can embody such capabilities, in an arguably more secure manner. To that end, we present a reference architecture and core protocol rules for digital-value-exchange systems that preserve meaningful user privacy while enabling strong auditability. The protocol defines the conditions under which digital asset creation, transfer, and redemption are valid. The architecture specifies the allocation of actors, roles and components through which these rules operate, enabling independent verification of transaction compliance with applicable norms. Building upon the Unforgeable, Stateful, Oblivious (USO) asset model of Goodell et al., regulatory compliance data are embedded directly into the asset state as cryptographically signed attestations issued by independent entities. A transfer is valid only upon satisfaction of applicable compliance predicates and inclusion of the resulting signature within the asset state. Compliance enforcement is thus performed at the protocol level rather than through institutional custody or identity-based account control. We conclude that our proposed model can successfully interface with existing payment systems, making it possible to integrate non-custodial, compliance-verified transactions with legacy financial infrastructure.

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arXiv2026

Methodology for Modelling Token Economies and Performing Event Impact Analysis with DeTEcT

The objective of this paper is to provide a methodology for applying the DeTEcT framework to modelling token economies, to formalise the configuration of the simulation environment, and to introduce an event analysis framework. A token economy is an economic system that has a unique mechanism for controlling its monetary supply, and a medium, in the form of a token or currency, for the valuation of goods and services, the settlement of transactions, and the storage of value. We show the key decisions that must be made when modelling an economy with the DeTEcT framework and showcase some numerical methods that can be used in conjunction with the framework to perform economic simulations. We also propose a framework for analysing and measuring the impacts of events on an economy, while also developing a procedure to measure the significance of these impacts. Throughout the paper, we use Bitcoin as a case study to demonstrate how to apply the frameworks and tools we proposed here. We show how a model of Bitcoin token economy can be set up, and how to measure the impacts of Bitcoin's endogenous policies (i.e., BIPs) on the wealth distribution of its economic participants.

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arXiv2026

Privacy is Fungibility: Why Endogenous Tokens Are Not Money

In this paper, we make a case that endogenous tokens such as cryptoassets are not money. First, we define and classify tokens found on public, permissionless ledgers, contrasting them with privately issued stablecoins and proposed CBDC designs. We then discuss the work of Kahn et al in Money is Privacy on cash versus simplified credit, and we extend their analysis to the situation found on most public, permissionless ledgers. Many public, permissionless ledgers utilize an account-based abstraction for balances, resulting in a default state that maps onto the most harmful models of agent interaction enumerated in Money is Privacy. The conclusion is threefold: that most blockchain economies lack a cash-like primitive; that stablecoins do not intrinsically fulfil this role; and that the reliance of a network on an endogenous token for security exposes holders even of a privacy-preserving asset to the same risk, if that asset relies on the same global ledger state as the endogenous token.

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arXiv2025

Certifying Digitally Issued Diplomas

We describe a protocol for creating, updating, and revoking digital diplomas that we anticipate would make use of the protocol for transferring digital assets elaborated by Goodell, Toliver, and Nakib. Digital diplomas would maintain their own state, and make use a distributed ledger as a mechanism for verifying their integrity. The use of a distributed ledger enables verification of the state of an asset without the need to contact the issuing institution, and we describe how the integrity of a diploma issued in this way can persist even in the absence of the issuing institution.

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arXiv2025

A Protocol for Compliant, Obliviously Managed Electronic Transfers

We describe a protocol for creating, updating, and transferring digital assets securely, with strong privacy and self-custody features for the initial owner based upon the earlier work of Goodell, Toliver, and Nakib. The architecture comprises three components: a mechanism to unlink counterparties in the transaction channel, a mechanism for oblivious transactions, and a mechanism to prevent service providers from equivocating. We present an approach for the implementation of these components.

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arXiv2024

Private Electronic Payments with Self-Custody and Zero-Knowledge Verified Reissuance

This article builds upon the protocol for digital transfers described by Goodell, Toliver, and Nakib, which combines privacy by design for consumers with strong compliance enforcement for recipients of payments and self-validating assets that carry their own verifiable provenance information. We extend the protocol to allow for the verification that reissued assets were created in accordance with rules prohibiting the creation of new assets by anyone but the issuer, without exposing information about the circumstances in which the assets were created that could be used to identify the payer. The modified protocol combines an audit log with zero-knowledge proofs, so that a consumer spending an asset can demonstrate that there exists a valid entry on the audit log that is associated with the asset, without specifying which entry it is. This property is important as a means to allow money to be reissued within the system without the involvement of system operators within the zone of control of the original issuer. Additionally, we identify a key property of privacy-respecting electronic payments, wherein the payer is not required to retain secrets arising from one transaction until the following transaction, and argue that this property is essential to framing security requirements for storage of digital assets and the risk of blackmail or coercion as a way to exfiltrate information about payment history. We claim that the design of our protocol strongly protects the anonymity of payers with respect to their payment transactions, while preventing the creation of assets by any party other than the original issuer without destroying assets of equal value.

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arXiv2024

DeTEcT: Dynamic and Probabilistic Parameters Extension

This paper presents a theoretical extension of the DeTEcT framework proposed by Sadykhov et al., DeTEcT, where a formal analysis framework was introduced for modelling wealth distribution in token economies. DeTEcT is a framework for analysing economic activity, simulating macroeconomic scenarios, and algorithmically setting policies in token economies. This paper proposes four ways of parametrizing the framework, where dynamic vs static parametrization is considered along with the probabilistic vs non-probabilistic. Using these parametrization techniques, we demonstrate that by adding restrictions to the framework it is possible to derive the existing wealth distribution models from DeTEcT. In addition to exploring parametrization techniques, this paper studies how money supply in DeTEcT framework can be transformed to become dynamic, and how this change will affect the dynamics of wealth distribution. The motivation for studying dynamic money supply is that it enables DeTEcT to be applied to modelling token economies without maximum supply (i.e., Ethereum), and it adds constraints to the framework in the form of symmetries.

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arXiv2024

Benchmarking the performance of a self-custody, non-ledger-based, obliviously managed digital payment system

As global governments intensify efforts to operationalize retail central bank digital currencies (CBDCs), the imperative for architectures that preserve user privacy has never been more pronounced. This paper advances an existing retail CBDC framework developed at University College London. Utilizing the capabilities of the Comet research framework, our proposed design allows users to retain direct custody of their assets without the need for intermediary service providers, all while preserving transactional anonymity. The study unveils a novel technique to expedite the retrieval of Proof of Provenance, significantly accelerating the verification of transaction legitimacy through the refinement of Merkle Trie structures. In parallel, we introduce a streamlined Digital Ledger designed to offer fast, immutable, and decentralized transaction validation within a permissioned ecosystem. The ultimate objective of this research is to benchmark the performance of the legacy system formulated by the original Comet research team against the newly devised system elucidated in this paper. Our endeavour is to establish a foundational design for a scalable national infrastructure proficient in seamlessly processing thousands of transactions in real-time, without compromising consumer privacy or data integrity.

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arXiv2024

Retail Central Bank Digital Currency: Motivations, Opportunities, and Mistakes

Nations around the world are conducting research into the design of central bank digital currency (CBDC), a new, digital form of money that would be issued by central banks alongside cash and central bank reserves. Retail CBDC would be used by individuals and businesses as form of money suitable for routine commerce. An important motivating factor in the development of retail CBDC is the decline of the popularity of central bank money for retail purchases and the increasing use of digital money created by the private sector for such purposes. The debate about how retail CBDC would be designed and implemented has led to many proposals, which have sparked considerable debate about business models, regulatory frameworks, and the socio-technical role of money in general. Here, we present a critical analysis of the existing proposals. We examine their motivations and themes, as well as their underlying assumptions. We also offer a reflection of the opportunity that retail CBDC represents and suggest a way forward in furtherance of the public interest.

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arXiv2024

Cash and Card Acceptance in Retail Payments: Motivations and Factors

The landscape of payment methods in retail is a complex and evolving area. Vendors are motivated to conduct an appropriate analysis to decide what payment methods to accept out of a vast range of options. Many factors are included in this decision process, some qualitative and some quantitative. The following research project investigates vendors' acceptance of cards and cash from various viewpoints, all chosen to represent a novel perspective, including the barriers and preferences for each and correlations with external demographic factors. We observe that lower interchange fees, limited in this instance by the regulatory framework, play a crucial role in facilitating merchants' acceptance of card payments. The regulatory constraints on interchange fees create a favorable cost structure for merchants, making card payment adoption financially feasible. However, additional factors like technological readiness and consumer preferences might also play a significant role in their decision-making process. We also note that aggregate Merchant Service Providers (MSPs) have positively impacted the payment landscape by offering more competitive fee rates, particularly beneficial for small merchants and entrepreneurs. However, associated risks, such as account freezes or abrupt terminations, pose challenges and often lack transparency. Last, the quantitative analysis of the relationship between demographic variables and acceptance of payment types is presented. This analysis combines the current landscape of payment acceptance in the UK with data from the most recent census from 2021. We show that the unemployment rates shape card and cash acceptance, age affects contactless preference, and work-from-home impacts credit card preference.

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arXiv2023

Emergency Financing Tokens

We propose a novel payment mechanism for use by victims of large-scale conflict or natural disasters to conduct critical economic transactions and rebuild damaged infrastructure in the absence of both cash and traditional electronic payment mechanisms linked to bank accounts, such as debit cards or wire transfers. Claimants shall receive electronic tokens that can be used to pay registered businesses, such as purveyors of food and other basic goods, providers of essential services, and contractors to carry out construction tasks. The system shall be based upon the scalable architecture for retail payments described in our earlier work, which provides both strong privacy for consumers and strong compliance enforcement for recipients of funds. The system shall be designed to achieve three main objectives. First, tokens issued to claimants would be held directly by the claimants themselves, not via intermediaries, to avoid the risk of failure or subversion of asset custodians. Second, transactions shall not be traceable to the identity of the claimants, thus mitigating the risk that claimants can be pressured by service providers or other parties to reveal information that can be used to exploit them. Third, businesses and service providers that receive tokens shall be subject to rigorous compliance procedures upon redemption for cash or bank deposits, thus ensuring that only legitimate businesses or service providers can receive value from tokens, that token transfers will embed the identities of any recipients beyond the initial claimant, and that tax obligations shall be met at the time of redemption.

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arXiv2023

Decentralized Token Economy Theory (DeTEcT)

This paper presents a pioneering approach for simulation of economic activity, policy implementation, and pricing of goods in token economies. The paper proposes a formal analysis framework for wealth distribution analysis and simulation of interactions between economic participants in an economy. Using this framework, we define a mechanism for identifying prices that achieve the desired wealth distribution according to some metric, and stability of economic dynamics. The motivation to study tokenomics theory is the increasing use of tokenization, specifically in financial infrastructures, where designing token economies is in the forefront. Tokenomics theory establishes a quantitative framework for wealth distribution amongst economic participants and implements the algorithmic regulatory controls mechanism that reacts to changes in economic conditions. In our framework, we introduce a concept of tokenomic taxonomy where agents in the economy are categorized into agent types and interactions between them. This novel approach is motivated by having a generalized model of the macroeconomy with controls being implemented through interactions and policies. The existence of such controls allows us to measure and readjust the wealth dynamics in the economy to suit the desired objectives.

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arXiv2023

Money: Who Has a Stake in the Most Value-Centric Common Design Material?

Money is more than just a numeric value. It embodies trust and moral gravity, and it offers flexible ways to transact. However, the emergence of Central Bank Digital Currency (CBDC) is set to bring about a drastic change in the future of money. This paper invites designers to reflect on their role in shaping material and immaterial monetary change. In this rapidly changing landscape, design could be instrumental in uncovering and showcasing the diverse values that money holds for different stakeholders. Understanding these diversities could promote a more equitable and inclusive financial, social, and global landscape within emergent forms of cash-like digital currency. Without such consideration, certain forms of money we have come to know could disappear, along with the values people hold upon them. We report on semi-structured interviews with stakeholders who have current knowledge or involvement in the emerging field of Central Bank Digital Currency (CBDC). Our research indicates that this new form of money presents both challenges and opportunities for designers. Specifically, we emphasise the potential for Central Bank Digital Currency (CBDC) to either positively or negatively reform values through its design. By considering time, reflecting present values, and promoting inclusion in its deployment, we can strive to ensure that Central Bank Digital Currency (CBDC) represents the diverse needs and perspectives of its users.

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arXiv2023

A non-custodial wallet for digital currency: design challenges and opportunities

Central Bank Digital Currency (CBDC) is a novel form of money that could be issued and regulated by central banks, offering benefits such as programmability, security, and privacy. However, the design of a CBDC system presents numerous technical and social challenges. This paper presents the design and prototype of a non-custodial wallet, a device that enables users to store and spend CBDC in various contexts. To address the challenges of designing a CBDC system, we conducted a series of workshops with internal and external stakeholders, using methods such as storytelling, metaphors, and provotypes to communicate CBDC concepts, elicit user feedback and critique, and incorporate normative values into the technical design. We derived basic guidelines for designing CBDC systems that balance technical and social aspects, and reflect user needs and values. Our paper contributes to the CBDC discourse by demonstrating a practical example of how CBDC could be used in everyday life and by highlighting the importance of a user-centred approach.

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arXiv2023

Response to "The digital pound: a new form of money for households and businesses"

This document constitutes a response to a Consultation Paper published by the Bank of England and HM Treasury, "The digital pound: a new form of money for households and businesses?", the latest document in a series that includes "Central Bank Digital Currency: opportunities, challenges and design" in 2020 and "New forms of digital money" in 2021. The Consultation Paper concerns the adoption of central bank digital currency (CBDC) for retail use in the United Kingdom by the Bank of England. We shall address the consultation questions directly in the third section of this document.

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arXiv2022

Digital currency hardware wallets and the essence of money

Many proposals for the design and implementation of digital wallets assume that the purpose of the wallet is to enable offline payments via custodial accounts, ignoring the real problems faced by individuals and businesses that engage in retail payments, such as the anticompetitive behaviour of payment platforms and the decline of cash. More importantly, the proposals ignore the raison d'\^etre of digital currency as a kind of digital money that can be held independently of custodians. Finally, the proposals demonstrate a profound lack of imagination about the nature of digital money and the devices that could be used to hold, manage, and exchange it. From these presumptions flows a set of architectural requirements that stifle the promise of digital currency to deliver novel and efficient ways to exchange value in the digital economy. In this article, we critically assess the essential problems that digital currency solutions are being proposed to solve, particularly with respect to the future of payments and the future of cash. We assess the validity of common justifications for account-based payments and certified hardware in the context of alternative designs, limitations, and trade-offs. We conclude that the interests of consumers would be better served by design approaches to digital currency that anticipate that digital assets would be held outside accounts, stored offline, but transacted online, without requiring the use of trusted hardware.

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arXiv2022

Token-Based Payment Systems

In this article, we consider the roles of tokens and distributed ledgers in digital payment systems. We present a brief taxonomy of digital payment systems that use tokens, and we address the different models for how distributed ledger technology can support digital payment systems in general. We offer guidance on the salient features of digital payment systems, which we comprehend in terms of consumer privacy, token issuance, and accountability for system operators.

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arXiv2022

Identification for Accountability vs Privacy

This document considers the counteracting requirements of privacy and accountability applied to identity management. Based on the requirements of GDPR applied to identity attributes, two forms of identity, with differing balances between privacy and accountability, are suggested, termed "publicly-recognised identity" and "domain-specific identity". These forms of identity can be further refined using "pseudonymisation" and as described in GDPR. This leads to the different forms of identity on the spectrum of accountability vs privacy. It is recommended that the privacy and accountability requirements, and hence the appropriate form of identity, are considered in designing an identification scheme and in the adoption of a scheme by data processing systems. Also, users should be aware of the implications of the form of identity requested by a system, so that they can decide whether this is acceptable.

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