The Future of Central Bank Digital Currencies
The BIS Innovation Hub and the Cyber Resilience Coordination Centre (CRCC) recently hosted a conference focused on “Securing the future monetary system: cyber security for central bank digital currencies” on November 8, 2023. General Manager Agustín Carstens emphasized the inevitability of CBDCs and highlighted the critical need for their security in the future financial system.
Carstens stressed that central banks must lead the way in adapting to the digital evolution of the financial landscape. The development of CBDCs is crucial, whether in wholesale or retail form, requiring versatile design and robust legal frameworks to gain public trust.
Central bank money’s integrity is fundamental to public confidence in the financial system. CBDCs bring new security challenges, with cyber risks being a significant concern. Addressing these risks is critical, necessitating flexible design to adapt to future technological advancements.
Privacy is also essential for public acceptance, particularly for retail CBDCs. The BIS Innovation Hub has been exploring solutions for secure and functional retail CBDCs, integrating quantum-resistant cryptography, and ensuring offline cyber resilience. The CRCC is enhancing collaboration and operational readiness among central banks through tools and exercises.
Carstens also emphasized the importance of shared cybersecurity and resilience as public goods among connected institutions, recognizing the vital role of the private sector in customer-facing services.
Critical Discussions on Cybersecurity Strategies
The conference set 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.
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