BIS Introduces Seven-Point Plan to Safeguard Digital National Currencies from Cyber Hacks
|BIS Introduces Seven-Point Plan to Safeguard Digital National Currencies from Cyber Hacks(Image-Getty)
The Bank for International Settlements (BIS), known as the central bankers' central bank, has unveiled a comprehensive seven-point plan aimed at assisting countries in safeguarding their digital national currencies from cyber hacks. With approximately 130 countries exploring the development of central bank digital currencies (CBDCs), concerns have emerged about the potential vulnerability of these online currencies to criminal activities and hostile state actors.
As an umbrella organization for major central banks worldwide, including the U.S. Federal Reserve, European Central Bank, and Bank of England, the BIS has been actively coordinating efforts in CBDC development. In two interconnected reports released on Friday, the BIS highlighted that CBDC systems are intricate, possess a large attack surface, and introduce new and heightened risks.
Analysis of previous cyber attacks on technologically advanced CBDCs has revealed weaknesses in security attack modeling systems, with the average "mean time to attack" on blockchain setups being approximately 10 months. Recognizing this critical concern, the BIS emphasized the need for central banks preparing to launch a CBDC to thoroughly prepare and establish robust monitoring and defense mechanisms against both well-known and emerging cyber threats.
The potential consequences of a successful attack on a CBDC extend beyond undermining public confidence in the new digital currencies to impacting the credibility of central banks and the broader financial system. Recent years have witnessed cyber attacks on various central banks, from Denmark to Bangladesh, and the theft of digital assets, including cryptocurrencies and non-fungible tokens (NFTs), resulting in losses of $10.5 billion in 2021, as reported by crypto research firm Elliptic.
The BIS's seven-point plan, named the "Polaris security and resilience framework," entails several crucial actions for central banks, including acknowledging the complexities and evolving threat landscape associated with CBDC systems, adopting appropriate modern enabling technologies to bolster security and resilience, assessing existing capabilities that can be leveraged for CBDC systems, identifying areas requiring improvement and implementing new capabilities, and utilizing the global "MITRE ATT&CK" database of past cyber attacks. Furthermore, the BIS recommends an official extension of the MITRE ATT&CK framework to enhance the security measures of central banks.