The Bank of England has enlisted payments platform Nuggets to work on a privacy and identity layer for any future digital pound.
Nuggets, which has built technology for decentralised identity, worked with the BofE and the BIS on the recently completed Project Rosalind, which explored how a "universal and extensible API layer" could connect central bank and private sector infrastructures and enable retail CBDC payments.
Now, the firm is being asked by the central bank to design a private and secure system that prevents the tracking and correlation of transactions, as well as stop fraud and money laundering.
Earlier this week, financial services minister Andrew Griffith cited privacy as a reason to "proceed cautiously" with designs for the digital pound.
While the BofE has said it will not make a final decision on introducing a Britcoin until at least 2025, deputy governor Jon Cunlifffe told a committee of MPs in February that a digital pound has a better than 50/50 chance of coming to fruition.
Since then, the bank has begun recruiting as it looks to create a team of up to 30 people to oversee the project.