Privacy-preserving auditable token payments in a permissioned blockchain system.

Token payment systems were the first application of blockchain technology and are still the most widely used one. Early implementations of such systems, like Bitcoin or Ethereum, provide virtually no privacy beyond basic pseudonymity: all transactions are written in plain to the blockchain, which makes them linkable and traceable. Several more recent blockchain systems, such as Monero or Zerocash, implement improved levels of privacy. Most of these systems target the permissionless setting, and as such are not suited for enterprise networks. These require token systems to be permissioned and to bind tokens to user identities instead of pseudonymous addresses. They also require auditing functionalities in order to satisfy regulations such as AML/KYC. We present a privacy-preserving token management system for permissioned blockchains that also supports fine-grained auditing. The scheme is secure under computational assumptions in bilinear groups, in the random-oracle model. We provide performance measurements for our prototype built on top of Hyperledger Fabric.