The BIS, an international organization of central banks, has been studying how to make CBDCs safe and sustainable. On Friday, they released new guidelines for creating a “security and resilience framework” for CBDCs.
The BIS released a paper on Friday that guides banks on how to mitigate risks associated with CBDC implementation.
Project Polaris is a paper from the BIS that guides how banks can protect critical infrastructure from the risks associated with CBDCs.
Many central banks have advanced cybersecurity protections in place, but the development and implementation of CBDCs may present additional vulnerabilities. While over 100 countries are currently exploring the potential advantages of CBDCs, including the United Kingdom and the United States, only a handful have proceeded beyond small-scale trial programs and into full implementation.
CBDC systems must be resilient to a broad range of disturbances, including momentary outages, continuous connection challenges, and even civil instability.
The Bank for International Settlements (BIS) discovered that modernized technology is required to enable and defend a central bank digital currency (CBDC).
The BIS advised that central banks must appoint a chief security officer (CSO) to monitor the security of their central bank digital currency (CBDC) systems in Project Polaris.
Project Polaris also suggests that central banks analyze the role of other players in the CBDC ecosystem, such as commercial banks and merchant partners. This would aid in the resilience of the CBDC system by identifying and mitigating threats at all levels of the ecosystem.
Central banks that decide to deploy CBDCs should ensure that they have secure technology and conduct frequent check-ups to maintain that security.