The
World
Economic
Forum
(WEF)
has
issued
a
stark
warning
about
the
vulnerabilities
in
central
bank
digital
currencies
(CBDCs),
urging
the
implementation
of
quantum-resistant
strategies
to
safeguard
these
digital
currencies
from
emerging
cybersecurity
threats.

According
to
a
recent
WEF
report
developed
with
insights
from
Accenture
experts,
quantum
computing
poses
significant
risks
to
current
encryption
techniques.

 

The
report
highlighted
that
more
than
98%
of
the
world’s
central
banks
are

exploring
CBDCs
to
improve
cross-border
payments
and
urged
developing
these
systems
with
the
risks
of
quantum
computing
in
mind.

Quantum
threats

Quantum
computers,
while
revolutionary
in
solving
complex
problems,
could
potentially
break
the
cryptographic
mechanisms
that
protect
financial
data,
making
CBDC
systems
highly
susceptible
to
cyberattacks.
This
is
particularly
concerning
as
CBDCs
aim
to

improve
cross-border
payments
and
enhance
financial
inclusion.

Accenture’s
experts
emphasized
the
need
for
central
banks
to
incorporate
cryptographic
agility
into
CBDC
systems.
Quantum
cyberattacks
could
intercept
networked
communications,
impersonate
individuals,
and
steal
financial
assets,
leading
to
severe
economic
impacts.

According
to
the
report:

“Quantum
computers
have
the
potential
to
revolutionize
data-intensive
tasks
across
sectors.
However,
they
also
pose
a
unique
cybersecurity
threat
as
they
could
break
current
encryption
schemes
that
protect
critical
financial
data.”

A
2021
Hudson
Institute
study
suggested
that
a
quantum
attack
on
the
US
real-time
gross
settlement
system
could
significantly
decrease
GDP
and
trigger
a
recession.

Countermeasures

The
WEF
report
recommends
several
strategies
to
mitigate
these
risks,
including
performing
quantum
security
risk
analyses,
cataloging
cryptographic
mechanisms,
and
imposing
strict
cyber-resilience
measures
on
entities
with
access
to
CBDC
systems.

 

Implementing
key
encapsulation
mechanisms
and
digital
signature
algorithms
to
secure
communications
and
identities
within
these
systems
is
also
crucial. International
efforts
are
underway
to
uncover
approaches
for
safeguarding
the
next
generation
of
national
payment
systems,
including
CBDCs.

The
WEF
has
formed
the
Quantum
Economy
Network
to
develop
guidance
for
the
financial
sector
on
informing
global
regulatory
approaches. Additionally,
the
Bank
for
International
Settlements
(BIS)
recently
published
the
results
of
its
Project
Leap,
which
advances
quantum-safe
cryptography
research
for
financial
systems.

The
report
concludes
that
cryptographic
agility
must
be
at
the
core
of
any
CBDC
system
to
safeguard
financial
infrastructure
from
quantum
cyber-attacks.
Collaboration
between
the
public
and
private
sectors
on
instituting
cyber-resilience
will
be
key
to
successfully
deterring
the
quantum
threat.

As
central
banks
pursue
CBDCs,
the
emphasis
on
quantum-resistant
strategies
will
be
crucial
in
ensuring
the
security
and
stability
of
future
financial
systems,
the
report
concluded.

 

Go to Source
Author: Assad Jafri

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