Relay Attack Prevention in Central Bank Digital Currency Systems: A Cryptographic Architecture Analysis with Focus on Digital Euro Implementation

Abstract Relay attacks represent a fundamental security challenge in Central Bank Digital Currency (CBDC) implementations, particularly for systems designed to support offline transactions and privacy-preserving features. This paper analyzes the structural vulnerabilities that enable relay attacks in conventional CBDC architectures, with specific attention to the European Central Bank's Digital Euro program. We examine the current state of relay attack mitigation in Digital Euro technical specifications and identify gaps between stated requirements and available countermeasures. The analysis demonstrates that conventional approaches—distance-bounding protocols, timing analysis, and proximity heuristics—remain insufficient for systems requiring simultaneous offline functionality, GDPR-compliant privacy, and cross-border interoperability. We present a technical evaluation of the Virtual Identity + Compliance Jurisdiction Token (VI+CJT) framework as a potential architectural countermeasure that addresses these combined requirements. Unlike probabilistic detection mechanisms, the VI+CJT architecture eliminates relay attack surfaces through context-binding cryptographic primitives. This work contributes to ongoing Digital Euro security architecture discussions by offering a formal analysis of relay attack vulnerabilities specific to the European context and proposing cryptographic mechanisms compatible with both EU regulatory frameworks and the ECB's 2029 operational timeline.