An international financial institution owned by the world’s central banks has announced a new framework designed to help member countries mitigate cyber risks associated with digital currencies.
Many countries, including the US and UK, are developing Central Bank Digital Currency (CBDC) systems. The Bank of England argued that the “digital pound” would provide “an anchor of confidence in our monetary system” and help “enhance people’s payment options”.
However, there are also serious and persistent cyber threats to digital currencies, from both financially motivated cybercriminal groups and nation states.
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That is why the Bank for International Settlements (BIS) on Friday unveiled Project Polaris, a security and resilience framework and threat modeling exercise for CBDCs.
“Breach of the CBDC system through cyberattacks or technical failures could not only create a range of reputational, operational and legal consequences, but also undermine trust and confidence in infrastructure, central banks and potentially the financial system. Yes,” said BIS. Said.
“Many central banks already have robust cybersecurity and resilience measures in place and adhere to the highest industry standards in control and risk management. It is important that senior leaders recognize the potential new and increased threats facing CBDC systems so that effective risk management and mitigation strategies can be established.”
The framework includes 100 control objectives built around a seven-step plan for security and resilience: prepare, identify, protect, detect, respond, recover, and adapt.
The BIS said central banks could use the framework to:
- Gain a deeper understanding of the new and complex CBDC threat landscape
- Adopt the right technology for security and resilience
- Understand where existing functionality can be used in a CBDC system
- Identify features that need to mature
- Identify new features that need to be implemented
This framework is intended to serve as a baseline and will be updated regularly as the threat landscape and CBDC technology evolves.
“Cybersecurity and resilience are essential to underpin trust in CBDC systems so that they work for everyone in society anytime, anywhere,” said Bej Shah, Director of the Nordic Center BIS Innovation Hub. claimed. “This framework will guide central banks as they work on CBDCs.”
