- COTI's privacy layer makes it uniquely suited for real-world CBDC infrastructure where regulators need visibility, but users still demand confidentiality.
- COTI’s architecture offers tools governments often overlook: sealed bids, private access control, selective data sharing.
- CBDCs may seem like competition but in practice, they amplify COTI’s value as a backend layer for compliant privacy and token logic.
- Every central bank exploring digital currencies will need the type of tech COTI already built.
CBDCs are divisive. To crypto idealists, they’re surveillance nightmares. To central banks, they’re the next frontier of digital finance. But in the middle sits a quiet opportunity, one that COTI might be perfectly built for.
Most crypto projects see CBDCs as a threat to decentralization. COTI sees them as a missing puzzle piece. Because here’s the twist: the more governments move toward programmable money, the more they’ll need programmable privacy. And COTI has been quietly building the rails for exactly that.
The Proposal That Changed the Narrative
In mid 2024, the Bank of Israel invited tech proposals for its digital shekel project, a CBDC pilot designed to test real-world payment and settlement systems. COTI submitted something bold: a CBDC-powered decentralized marketplace for real-world assets (RWAs).
The idea? Let users buy, sell, and settle tokenized goods like real estate, equipment, or intellectual property using the digital shekel. But with privacy features baked in: sealed bids, private access to listings, and transaction confidentiality for buyers and sellers.
COTI built a full proof-of-concept and demoed how it could run on the Bank’s own sandbox.
— Source
And here’s the kicker: most of what COTI proposed is already possible on its existing infrastructure.
Why Most CBDC Builders Miss the Point
CBDC development usually focuses on the basics: digital wallets, stable coin issuance, and transaction rails. But that’s just the front end. The real work happens in logic and policy like what transactions are allowed, what data is shared, and what privacy protections are in place.
That’s where most systems fall short.
- They either expose too much (violating user privacy)…
- Or they hide too much (making compliance impossible)…
- Or they rely on central intermediaries (which reintroduce trust).
COTI offers a middle path.
Its Garbled Circuits technology allows selective disclosure meaning data can be processed and verified without being exposed. That’s crucial for CBDCs, where regulators need access to certain data but users still deserve financial confidentiality.
It’s not about hiding from regulators. It’s about protecting individuals from overexposure while still making compliance work.
COTI V2: The CBDC Backend Nobody Saw Coming
While most chains chase retail hype, COTI’s V2 stack quietly checks off all the boxes central banks actually care about:
1. Private Computation
Garbled Circuits let you run contract logic without exposing inputs or internal values.
— Shahaf Bar-Geffen, AMA Recap
2. Identity Without Surveillance
CBDCs require some form of ID. COTI allows identity proofs without sharing raw documents or creating honeypots of user data.
3. Compliance-Ready Design
Rather than hide everything, COTI lets builders choose what’s disclosed, to whom, and under what circumstances. It’s privacy with a policy layer and not just encryption.
4. Off-Chain Data Hooks
Need to reference external records (like licenses, property titles, or financial statements)? COTI’s design allows off-chain oracles and validators to plug in securely.
This makes it more than a privacy coin. It’s a toolkit for programmable, compliant digital finance.
Real Assets Meet Real Infrastructure
The “RWA” (Real World Assets) boom has been mostly hype, limited by outdated legal systems and inflexible blockchain tooling.
COTI’s digital shekel proposal tackled that head-on by:
- Enabling sealed bids in asset auctions
- Letting sellers gate visibility to certain buyers
- Using the digital shekel for on-chain payment and settlement
- Making transactions private by default, not public
It’s everything legacy platforms like OpenSea or Uniswap can’t do and everything banks and asset managers quietly need. And it doesn’t require rewriting regulation. It just fits into it.
CBDCs Aren’t the Competition—They’re the Catalyst
It’s tempting to see CBDCs as a threat to crypto. After all, they’re government-issued. But for infrastructure projects like COTI, they’re a growth engine.
Here’s why:
1. CBDCs create massive demand for programmable, private systems
Banks don’t want transparency for every line item. Merchants want privacy. So do users. But they also need systems that regulators can work with. COTI solves that.
2. CBDCs normalize digital assets
The more governments talk about tokenization, the easier it is for builders to pitch token-based systems (like COTI’s RWA marketplace) to real-world clients.
3. CBDCs make selective disclosure the norm
If users expect some privacy, and regulators expect some visibility, platforms that do both become critical. That’s COTI’s sweet spot.
4. CBDCs don’t kill stablecoins, they frame them
A central bank might issue the base layer, but the logic and programmability will come from third-party ecosystems. Just like Visa and PayPal weren’t threats to cash, they built on top of it.
From Proposal to Blueprint
COTI’s work with the Bank of Israel serves as a strong example that other central banks can follow. Whether it’s the digital pound, digital euro, or projects in Singapore and UAE, the challenges are the same:
- How to make payments programmable
- How to preserve user privacy
- How to respect policy constraints
- How to settle real-world asset trades efficiently
- How to avoid building fragile, custom infrastructure
COTI is quietly positioning itself as a default option. Not the only one but maybe the most realistic one.
COTI has already been announced as a Pioneer Partner in the European Central Bank’s (ECB) Digital Euro project.
The Bigger Picture: Legitimacy Through Utility
COTI has often flown under the radar. It’s not a retail chain. It doesn’t ride meme cycles. But it’s slowly becoming something more valuable: an institutional-grade privacy platform with real utility.
And in an era where governments are building their own money, that kind of infrastructure is going to be in demand. COTI’s journey from DAG-based payments to privacy-preserving CBDC proposals shows how quickly narratives can shift. It’s less about making noise and more about being truly useful when the time comes.
Final Word
CBDCs will change how money moves. That much is inevitable. The question is who will build the systems that make them usable, private, and programmable. COTI is working alongside central banks, building the behind-the-scenes tech that both they and their citizens will depend on. And in that quiet positioning lies one of crypto’s most overlooked, long-term bets.
COTI is positioned to thrive in the CBDC wave and could ride it all the way to relevance.
