June 13, 2024
WEF Warns of CBDC Vulnerability to Quantum Attacks
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WEF Warns of CBDC Vulnerability to Quantum Attacks

The World Economic Forum (WEF) recently issued a stark warning regarding the susceptibility of central bank digital currencies (CBDCs) to decryption attacks from quantum computer systems.

World Economic Forum, Source: Flickr

Implications of Quantum Computing

Quantum computers are still largely experimental, with various proofs-of-concept and some laboratories claiming breakthroughs in solving problems that traditional computers couldn’t tackle within a reasonable timeframe. However, there’s a significant gap between the current state and “Q-Day,” when quantum computers could potentially crack standard encryption.

Threats to CBDCs

The WEF highlights the digital assets sector’s vulnerability to quantum computing, stating that it has the potential to “break” CBDCs. Specifically, the WEF emphasizes the importance of embedding cryptographic agility into CBDC systems to defend against quantum cyberattacks targeting payment infrastructure.

“More than 98% of the global economy’s central banks are exploring CBDCs … In parallel, the private sector is pursuing scalable quantum computers that can operate at scale to create $1.3 trillion in value by 2025.”

Specific Threats Identified

The WEF identifies three specific threats to CBDCs posed by quantum computing. Firstly, quantum computers could break “in motion encryption,” allowing interception of transactions in real-time. Secondly, there’s the threat of identity impersonation, where encryption protecting identity verification systems could be compromised, enabling spoofed identity assets. Finally, the “harvest now, decrypt later” attack vector involves bad actors stealing encrypted data for future decryption by quantum systems, potentially leaving victims unaware for years or even decades.

Mitigation Strategies

To address these threats, the WEF recommends building CBDCs with quantum-proof protections at their core, employing a methodology called “cryptographic agility.” This approach allows systems to adapt and update cryptographic algorithms as needed to stay ahead of evolving threats posed by quantum computing.

“Cryptographic agility is a capability that provides the ability to orchestrate and rotate cryptographic algorithms based on real-time threats easily and to thwart evolving attack techniques.”

In summary, the WEF’s warning underscores the importance of anticipating and addressing the potential risks posed by quantum computing to CBDCs. Implementing quantum-proof protections is crucial to safeguarding the integrity and security of digital payment infrastructure in the face of advancing technology.

Image by Pete Linforth from Pixabay

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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