Over 100 central banks around the globe are exploring central bank digital currencies (CBDCs) to modernize payment systems. They aim to explore potential benefits, risks, and the broad range of new capabilities CBDCs might offer. Some view CBDC exploration as an opportunity to rethink their existing, legacy payment systems and build a resilient and secure infrastructure using modern technologies. However, a CBDC creates a vast and complex ecosystem that amplifies existing risk exposures and surfaces new ones. Given the implications of issuing a CBDC, it should be seen as a fundamental change in the way the central bank operates. This note considers experiences from live CBDCs and is informed by experiments conducted by central banks and international institutions for domestic use. It also draws from cybersecurity and resilience frameworks from standard-setting bodies.
Authors
- Format
- Paper
- Frequency
- occasional
- ISBN
- 9798400286995
- ISSN
- 2664-5912
- Pages
- 53
- Published in
- United States of America
- Series
- Fintech Notes No 2024/003
- StockNumber
- FTNEA2024003
Table of Contents
- Box 1. Impact of Artificial Intelligence (AI) on Cybersecurity 14
- 2.1. CBDC: A Highly Interconnected Ecosystem 15
- 2.2. Cyber Risk Perimeter of a CBDC 16
- 3.1. Design Option 1: Distribution Model 20
- 3.2. Design Option 2: Token or Account-Based 21
- Box 2. Impact of Quantum Computing on CBDC Cybersecurity 22
- 3.3. Design Option 3: Ledger Design 23
- Centralized Ledger Technology (CLT) 23
- Distributed Ledger Technology (DLT) 24
- 3.4. Design Option 4: Offline Functionality 28
- 3.5. Design Option 5: Use of Third Parties for Critical Services 31
- 4.1. High-Level Principles for Protecting a CBDC Ecosystem 34
- 4.2. Foundational Requirements 38
- 4.3. Good Practices 39
- 4.4. Cyber Resilience and CBDC Project Management 42
- Box 3. A Candid View from Technology Vendors and Solution Providers 44
