A Hitchhiker's Guide to Privacy-Preserving Cryptocurrencies: A Survey on Anonymity, Confidentiality, and Auditability

Abstract: Cryptocurrencies and central bank digital currencies (CBDCs) are reshaping the monetary landscape, offering transparency and efficiency while raising critical concerns about user privacy and regulatory compliance. This survey provides a comprehensive and technically grounded overview of privacy-preserving digital currencies, covering both cryptocurrencies and CBDCs. We propose a taxonomy of privacy goals -- including anonymity, confidentiality, unlinkability, and auditability -- and map them to underlying cryptographic primitives, protocol mechanisms, and system architectures. Unlike previous surveys, our work adopts a design-oriented perspective, linking high-level privacy objectives to concrete implementations. We also trace the evolution of privacy-preserving currencies through three generations, highlighting shifts from basic anonymity guarantees toward more nuanced privacy-accountability trade-offs. Finally, we identify open challenges at the intersection of cryptography, distributed systems, and policy definition, which motivate further investigation into the primitives and design of digital currencies that balance real-world privacy and auditability needs.