BIS Conference Addresses Cybersecurity in Central Bank Digital Currencies (CBDC)
Luisa Crawford Nov 09, 2023 05:15
Agustín Carstens, General Manager of the Bank for International Settlements, highlighted the importance of cybersecurity for central bank digital currencies (CBDCs) during a conference in Basel, Switzerland, emphasizing the need for secure, user-friendly, and adaptable systems.
The BIS Innovation Hub and the Cyber Resilience Coordination Centre (CRCC) hosted a conference on November 8, 2023, focused on "Securing the future monetary system: cyber security for central bank digital currencies". General Manager Agustín Carstens opened the event with a clear message: the advent of CBDCs is inevitable, and their security is paramount to the future financial system.
As the financial landscape is on the verge of substantial change, Carstens pointed out that central banks are tasked with not only keeping up with the digital evolution but leading the way. This leadership is embodied in the development of CBDCs, which are poised to be at the heart of the financial system. Whether they take on a wholesale or retail form, their design needs to be versatile and their legal frameworks robust to gain public trust.
The integrity of central bank money is a cornerstone of the public's confidence in the financial system. CBDCs introduce new levels of security challenges, with cyber risks being a significant concern. Carstens cited the vulnerabilities exposed in the crypto universe as a cautionary tale for CBDCs, which carry much higher stakes. Addressing these risks is critical, necessitating a flexible design that can adapt to future technological advancements, including the potential impact of quantum computing and generative AI.
While focusing on security, Carstens didn't overlook the importance of privacy in CBDC design, considering it essential for public acceptance, especially for retail CBDCs.
The BIS is firmly committed to aiding central banks in their journey towards a digital future. The Innovation Hub has been at the forefront, exploring solutions for secure and functional retail CBDCs, integrating quantum-resistant cryptography, and ensuring offline cyber resilience. Concurrently, the CRCC is enhancing collaboration and operational readiness among central banks through tools and exercises.
Carstens also recognized the vital role of the private sector, particularly in customer-facing services, and stressed the importance of shared cybersecurity and resilience as public goods among connected institutions.
The conference sets the stage for critical discussions on cybersecurity strategies for CBDCs, governance, risk management, and technical challenges, including the quantum computing threat. Carstens concluded with anticipation for the insights that the conference's discussions will yield, reflecting the BIS's readiness to guide and support central banks in securing the monetary system's future.
Image source: Shutterstock