BIS Unveils Security Framework for CBDCs: Protecting the Future of Digital Money

• The Bank for International Settlements (BIS) introduced a security framework on July 7 to help central banks develop secure digital currencies.
• BIS noted that central bank digital currencies (CBDCs) will become “critical national infrastructure” in the future and cyber attacks must be prevented.
• A CBDC system breach could erode confidence and trust in the CBDC, the central bank, and the financial system.

Introduction

The Bank for International Settlements (BIS) introduced a security framework on July 7 to help central banks develop secure digital currencies. This new Polaris framework is meant to assist with designing and implementing a secure system for CBDCs, particularly those running on blockchain technology.

Potential Impact of Cyber Attacks

BIS noted that central bank digital currencies (CBDCs) will become “critical national infrastructure” in the future due to its potential widespread use. In order to protect this important asset, cyber attacks against critical infrastructure must be prevented as it can have significant impact on public trust and confidence. A CBDC system breach could lead to reputational, operational, and legal implications such as erosion of faith in the CBDC, central bank, and financial system.

Seven-Step Framework

In order to address these issues posed by cyber threats, BIS proposed a seven-step framework which includes: Risk Identification; Risk Assessment; Security Architecture Design; Continuous Assurance; Responsible Disclosure Policy; Secure Deployment Processes; and Operational Readiness Checklist. Each step provides detailed guidance for different areas related to security such as threat modeling, risk assessment processes, development lifecycle management etc., which would help ensure effective implementation of security measures throughout the entire life cycle of a CBDC project.

Conclusion

To conclude, BIS‘ Polaris Framework aims at helping central banks create a secure environment when developing their own digital currency systems. Through various steps outlined in this framework including risk identification and assessment as well as continuous assurance processes ,governments can ensure protection against potential cyber threats while also ensuring seamless deployment of their respective projects.

References

Monika Ghosh · 2 days ago · 2 min read News › CBDCs BIS unveils 7-step security framework for blockchain-based CBDCs

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