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BIS Introduces Defensive Measures For CBDCs Against DeFi-Related Cyber Threats

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Central Bank Digital Currencies (CBDCs) are part of the digital economy’s evolution. However, as these digital assets gain traction, they also become targets for cyber attacks, especially those associated with Decentralized Finance (DeFi).

The Bank of International Settlements (BIS) has risen to this challenge, devising a plan to safeguard CBDCs from such threats.

The BIS, renowned for supporting global monetary and financial stability, has developed a framework to fortify CBDCs against cyberattacks in the DeFi sector. The strategy specifically targets vulnerabilities associated with Distributed Ledger Technology (DLT) and smart contract technologies that CBDCs often employ.

Responding To DeFi Risks

Highlighting the urgency of the initiative, the BIS report mentioned that the attacks on distributed ledger technology protocols and smart contracts in decentralized finance highlight possible operational and reputational threats.

Losses in DeFi have been reported due to past breaches in smart contracts; this illustrates the potential security risks that central bank digital currency systems might encounter. The report noted:

The large-value attacks on DLT protocols and smart contracts in the DeFi space underscore the potential operational and reputational risks. Recent examples of smart contract hacks, which have led to the loss of a significant amount of value in DeFi, serve as an example of the potential security risks CBDC systems could face.

With the growth of the internet and telecommunications networks, the cyber threat landscape has become more complex. These risks aren’t just limited to online components but cou

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Author: Samuel Edyme

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