Digital bank robberies key risk for central bank e-money – Finance

Please log in or register to do it.

Digital bank robberies and other cyber hacks will be a key risk for countries launching digital versions of their currencies, a new report from the Bank for International Settlements has warned.

The BIS, dubbed the central bankers’ central bank, has been overseeing much of the global development work on central bank digital currencies (CBDCs) and its report is its most comprehensive assessment yet of the challenges.

They range from whether central banks have the technological know-how to provide digital cash and the potential dangers of outsourcing work to the damaging environmental impact their huge energy needs could have.

A worst case scenario though would be a cyber hack that saw money stolen from what would effectively be a central bank’s digital vault.

“Cyber security is a key risk for CBDCs,” the report said, adding they would have “far-reaching implications” for the way central banks currently operate.

The number of banks across the globe that are working on CBDCs has tripled over the last three years – to 130 as of mid-2023.

Nearly a dozen have already been launched, including in the Bahamas and Nigeria. China is trialling a prototype digital yuan with 200 million users, while the European Central Bank has just begun two years of advanced-stage exploratory work.

“Issuing a CBDC will have major implications for the business model of central banks and the risks they face, and it will modify their risk profiles,” the BIS report said.

It added that CBDCs using new technologies such as distributed ledger technology (DLT) will face “unique cyber risks” as there is no widely accepted cyber security framework currently.

Furthermore, central banks are flying somewhat blind as there is “limited real world data on the key threats to CBDCs, regardless of the type of technology they use.”

Source link

Charmaine Sheh Really Likes This Chinese Influencer’s Impersonation Of Her Man-Jie Character In TVB Drama The Queen Of News
How To Start Investing For Beginners