Cyber Resilience of the Central Bank Digital Currency Ecosystem

Fintech Notes, August 27, 2024

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Cyber Resilience of the Central Bank Digital Currency Ecosystem

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Bibliographic details

• Authors: Arvinder Bharath, Anca Paduraru, Tamas Gaidosch
• Published: August 27, 2024
• Series: Fintech Notes
• DOI: https://doi.org/10.5089/9798400286995.063

Summary and central findings

• Over 100 central banks around the globe are exploring central bank digital currencies (CBDCs) to modernize payment systems.
• Central banks aim to explore potential benefits, risks, and the broad range of new capabilities CBDCs might offer.
• Some central banks view CBDC exploration as an opportunity to rethink existing, legacy payment systems and build a resilient and secure infrastructure using modern technologies.
• 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.
• The note considers experiences from live CBDCs and is informed by experiments conducted by central banks and international institutions for domestic use.
• The analysis also draws from cybersecurity and resilience frameworks from standard-setting bodies.

Risks, analysis focus, and technical scope

• Emphasis on cyber risk and cybersecurity of an information system within the CBDC ecosystem.
• Attention to infrastructure considerations and the concept of a security perimeter.
• Recognition that smart contracts and related technologies introduce additional risk vectors.
• The ecosystem-level perspective underscores that design and operational decisions can amplify or mitigate systemic exposures.

Policy implications and recommended perspective

• Treat issuance of a CBDC as a fundamental operational change for the central bank, not merely a technical upgrade.
• Use CBDC exploration as an opportunity to modernize legacy payment systems with resilience and security as core design objectives.
• Leverage lessons from live CBDCs and experimental work by central banks and international institutions, and align designs with cybersecurity and resilience frameworks from standard-setting bodies.

Publication and metadata

• Authors: Arvinder Bharath, Anca Paduraru, Tamas Gaidosch
• Publication date: August 27, 2024
• Series: Fintech Notes No 2024/003
• Issue: 003
• Volume: 2024
• Pages: 53
• DOI: https://doi.org/10.5089/9798400286995.063
• Stock No: FTNEA2024003
• ISBN: 9798400286995
• ISSN: 2664-5912
• Subjects: Central Bank digital currencies, Cyber risk, Infrastructure, National accounts, Smart contracts, Technology
• Keywords: CBDC ecosystem, CBDCs, Central Bank digital currencies, Central bank digital currency, central bank digital currency ecosystem, cyber risk, cybersecurity, cybersecurity of an information system, data breach, digital money, fintech, Global, Infrastructure, security perimeter concept, Smart contracts

Content derived from "Cyber Resilience of the Central Bank Digital Currency Ecosystem", Fintech Notes 2024, 003 (2024).

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