Advantages for Governments

Taler provides accountability to ensure business operate legally, while also respecting civil liberties of citizens. Taler is a payment system based on open standards and free software. Taler needs governments as they set a financial framework and act as trusted regulators. Taler contributes to digital sovereignty in the critical financial infrastructure.

Taxable

Taler was built with the goal of fighting corruption and supporting taxation. With Taler, the receiver of any form of payment is easily identified by the government, and the merchant can be compelled to provide the contract that was accepted by the customer. Governments can use this data to tax businesses and individuals based on their income, making tax evasion and black markets less viable.

Thus, despite offering anonymity for citizens spending digital cash to buy goods and services, Taler also ensures that the state can observe incoming funds. This can be used to ensure businesses engage only in legal activities, and do not evade income tax, sales tax or value-added tax. However, this observational capability does not extend to the immediate personal domain. In particular, monitoring does not cover shared access to funds with trusted friends and family, or synchronizing wallets across multiple devices.

Secure

Taler's payments are cryptographically secured. Thus, customers, merchants and the Taler payment service provider (the exchange) can mathematically demonstrate their lawful behavior in court in case of disputes. Financial damages are strictly limited, improving economic security for individuals, merchants, the exchange and the state.

As a payment service provider, the Taler exchange is subject to financial regulation. Financial regulation and regular audits are critical to establish trust. In particular, the Taler design mandates the existence of an independent auditor who checks cryptographic proofs that accumulate at the exchange to ensure that the escrow account is managed honestly. This ensures that the exchange does not threaten the economy due to fraud.

Libre

Taler is free software implementing an open protocol standard. Thus, Taler will enable competition and avoid the monopolization of payment systems that threatens global political and financial stability today.

Efficient

Taler has an efficient design. Unlike Blockchain-based payment systems, such as Bitcoin, Taler will not threaten the availability of national electric grids or (significantly) contribute to environmental pollution.

Taler and regulation

Anti money laundering (AML)
With Taler, income is visible and can be tied to the contract signed by both parties.
Know your customer (KYC)
In Taler, payer and payee are known by their bank accounts when withdrawing or depositing coins respectively
General Data Protection Regulation (GDPR)
Taler cryptographically protects citizen's privacy, and by design implements data minimization and privacy by default.
Payment Services Directive (PSD2)
Taler provides an open standard with public APIs contributing to a competitive banking sector.

Taler provides privacy and accountability

Taler assumes governments can observe traditional wire transfers entering and leaving the Taler payment system. Starting with the wire transfers, governments can obtain:

  • The total amount of digital currency withdrawn by a customer. The government can impose limits on how much digital cash a customer can withdraw within a given time frame.
  • The income received by any merchant via the Taler system.
  • The exact details of the underlying contract that was signed between customer and merchant. However, this information would typically not include the identity of the customer.
  • The amounts of digital coins legitimately withdrawn by customers from the exchange, the value of non-redeemed digital coins in customer's wallets, the value and corresponding wire details of deposit operations performed by merchants with the exchange, and the income of the exchange from transaction fees.