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Privacy-Enhancing Technologies For Compliant Decentralised Finance

Objective

PETs4DeFi – Privacy-Enhancing Technologies for Compliant Decentralised Finance will develop a privacy-preserving and compliance-by-design framework for decentralised finance. The project addresses a key challenge for the future of digital finance: how to protect users’ privacy while enabling lawful, proportionate and accountable compliance with anti-money laundering, counter-terrorist financing and supervisory requirements.
Over 36 months, PETs4DeFi will advance privacy-enhancing technologies from laboratory validation towards demonstration in operationally relevant environments. The project will combine zero-knowledge proofs, self-sovereign identity, EUDI wallets, verifiable credentials and privacy-preserving compliance oracles. These technologies will make it possible to support confidential transactions while allowing selective disclosure of the information needed for compliance checks and regulatory oversight.
The project will be delivered by a public-private partnership bringing together universities, research organisations, technology companies, cybersecurity and compliance specialists, professional bodies and SME partners. This combination of academic, industry, regulatory and practitioner expertise will ensure that the project’s results are technically robust, legally sound and relevant for real-world adoption.
Key outputs will include open-source software toolkits, zero-knowledge libraries, smart-contract templates, software development kits, reference decentralised finance applications, supervisory dashboards, and a governance and standards pathway aligned with GDPR, eIDAS and relevant European digital finance priorities. The project will also produce a compliance blueprint showing how privacy and regulation can coexist in decentralised financial systems without creating unnecessary surveillance or technical backdoors.
PETs4DeFi will validate its approach through two pilots in operationally relevant settings, focusing on privacy-enhanced decentralised exchange and lending use cases, zk-KYC, compliance oracles and supervisory interfaces. The pilots will involve end users, SMEs, developers, compliance actors and regulators to test usability, performance, trustworthiness and regulatory relevance.
In the long term, PETs4DeFi aims to support trustworthy digital finance and European technological sovereignty by providing reusable, open and standards-aligned building blocks for privacy-preserving compliance. The project will help developers, SMEs, platforms and supervisory stakeholders adopt decentralised finance solutions that are more secure, privacy-respecting and compliant with European values and legal frameworks.

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Topic(s)

Funding Scheme

HORIZON-RIA - HORIZON Research and Innovation Actions

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Call for proposal

(opens in new window) HORIZON-CL3-2025-02-CS-ECCC

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Coordinator

ASTON UNIVERSITY
Net EU contribution
€ 504 000,00
Address
ASTON TRIANGLE
B4 7ET Birmingham
United Kingdom
Activity type
Higher or Secondary Education Establishments
Links
Total cost
No data

Participants (16)