The story of GNU TALER, a privacy-respecting digital payment system made in Europe

Taler Systems SA, a technology company specialized in creating free software for digital payment systems, developed a privacy-respecting digital payment system with built-in age restrictions that allows for fast and secure transactions with anonymity for the buyer: GNU Taler System. The project is funded by Next Generation Internet, a European Comission initiative that is is supporting “commons” and open-source projects, both at the European and national levels.

The Taler system uses established cryptography, ensuring that transactions are processed quickly and securely with user privacy. This makes the GNU Taler system ideal for use in various industries, including e-commerce, micropayments, and the sharing economy. The GNU Taler system is highly scalable, allowing it to handle many transactions per second on cheap and power-saving hardware.

Overall, the GNU Taler system offers a unique solution for anyone looking to securely and anonymously process digital payments in the spirit of GDPR. GNU Taler works for standard and crypto-currencies.

„Working on a decentralized privacy-preserving Next Generation Internet, it was clear that we needed a privacy-preserving payment system. However, blockchains were not a socially desirable solution due to their high environmental and social cost. We have added various features over time  based on ideas from the team or requirements brought to us from third parties, but the basic idea of building a privacy-preserving payment system has remained unchanged”, says Christian Grothoff, CEO of Taler Systems.

The authors are a global community of Free Software developers and privacy activists with roots in the GNU project. We have contributors of all genders from ages 14 to 70 years and over a dozen countries speaking various natural and programming languages, trying to follow the culture of the GNU way of communicating.

GNU Taler has repeatedly received support from NGI. „NGI funded the first external security audit of the protocol and core implementation, the integration into the e-commerce solution WooCommerce with usability studies, scalability experiments on the Grid5000, age-restrictions, escrow and peer-to-peer payments, accessibility reviews to ensure the payment system is usable by blind people and is providing ongoing funding for enhancements to support regional currencies and the development of a Taler wallet on iOS. At the time of our first NGI funding for GNU Taler, we had a first working prototype with academic publications backing the idea but no external reviews of the Taler-specific code”, adds Christian Grothoff, CEO of Taler Systems.

As NGI support is still ongoing,  Christian Grothoff hopes that with continued support, they will be able to bring GNU Taler into the European market as a payment solution operated by retail or central banks.

Operating GNU Taler, in general, is expected to require an e-money issuer license. They are still adding required AML and KYC features that seem necessary before anyone can legally use the payment system at scale. However, members of the community have already successfully used the payment system to handle payments for drinks at a conference and it is also in limited operation at the BFH.

„The GNU Project encourages contributions from anyone who wishes to advance the development of the GNU system, regardless of gender, race, ethnic group, physical appearance, religion, cultural background, and any other demographic characteristics, as well as personal political views. We do not have a special treatment when it comes to gender, we welcome talented, enthusiastic and motivated folks from all genders and parts of the world”, says the CEO of Taler Systems.

What is new and original in this project

GNU Taler offers one-sided privacy, where the person making a payment remains anonymous to the other party and the payment system operators, while anyone receiving payments can be easily identified by the operator. This prevents mass surveillance in the private domain (where we spend money) while preventing criminals from using the system to receive money for illegal business activities or evading taxation.

Currently, there is no privacy-preserving, usable, efficient and legal payment system for the Internet.

„In 10 years, GNU Taler will either be the technology backing the Digital Euro, or GNU Taler, will be the technology that made the Digital Euro project of the European Central Bank obsolete, or we will be “enjoying” life without liberty under a government in absolute control”, concludes Christian Grothoff, CEO of Taler Systems.

About Next Generation Internet (NGI)

The NGI initiative is funding “commons” and open-source projects, both at the European and national levels. Several initiatives, including some digital commons communities, call for specific needs that the NGI initiative groups and connects these networks within the NGI Ecosystem, enabling sharing of expertise, knowledge, and the current concentration of Internet resources.

The NGI is also actively promoting open calls launched by the European Commission and by the NGI project partners targeting strategic digital commons and giving opportunities for researchers and innovators to fund and support their ideas.

Digital Commons are among the core assets to pursue Europe’s Digital Sovereignty. The future of technologies must support a fair and democratic Europe and seek prosperous opportunities by shaping tomorrow’s digital society. The NGI Initiative sees that Europe has great potential to position itself at the forefront of an open and democratic digital nation.