The World Economic Forum (WEF) has highlighted significant vulnerabilities in central bank digital currencies (CBDCs) and stressed the need for quantum-resistant strategies to protect these digital currencies from emerging cybersecurity threats.

A recent WEF report, created with input from Accenture experts, indicates that quantum computing presents major risks to current encryption methods. The report noted that over 98% of the world's central banks are investigating CBDCs to enhance cross-border payments and emphasized the importance of considering quantum computing risks in their development.

Quantum Threats

Quantum computers, though revolutionary for solving complex problems, could potentially compromise the cryptographic protections of financial data, making CBDC systems particularly vulnerable to cyberattacks. This is especially concerning given that CBDCs aim to enhance cross-border payments and financial inclusion.

Accenture experts stressed the necessity for central banks to build cryptographic agility into CBDC systems. Quantum cyberattacks could intercept communications, impersonate users, and steal financial assets, causing severe economic repercussions.

The report stated, “Quantum computers have the potential to revolutionize data-intensive tasks across sectors. However, they also pose a unique cybersecurity threat as they could break current encryption schemes that protect critical financial data.”

A 2021 Hudson Institute study indicated that a quantum attack on the US real-time gross settlement system could significantly reduce GDP and trigger a recession.

Countermeasures

The WEF report suggests several strategies to mitigate these risks, including conducting quantum security risk assessments, cataloging cryptographic methods, and imposing strict cyber-resilience measures on entities with access to CBDC systems.

It also recommends implementing key encapsulation mechanisms and digital signature algorithms to secure communications and identities within these systems. International efforts are ongoing to identify approaches for protecting the next generation of national payment systems, including CBDCs.

The WEF has established the Quantum Economy Network to provide guidance to the financial sector on global regulatory approaches. Additionally, the Bank for International Settlements (BIS) has recently released the results of Project Leap, which advances research on quantum-safe cryptography for financial systems.

The report concludes that cryptographic agility must be central to any CBDC system to protect financial infrastructure from quantum cyber-attacks. Collaboration between the public and private sectors on instituting cyber-resilience will be crucial for deterring the quantum threat.

As central banks develop CBDCs, prioritizing quantum-resistant strategies will be essential to ensure the security and stability of future financial systems, the report concluded.