BIS’ Eurosystem Centre to Execute Crypto, Payments Security Projects | #cybersecurity | #cyberattack


The Bank for International Settlements (BIS)
Innovation Hub’s Eurosystem Centre will work on three initial
projects upon launch “in the coming months”.

The Centre is expected to be launched across locations in Frankfurt, Germany; and
Paris, France.

These projects are centered on cryptocurrency
market intelligence, securing the privacy of payments security, and bridging
data gaps related to climate change discourses.

The assigned undertakings of the Eurosystem
Centre are part of the new set of projects the BIS Innovation Hub
announced on Friday across its various centres.

They are part of updates to the Hub’s 2022 work
programme.

The BIS has innovation hubs in Switzerland, Hong Kong, Singapore, Sweden and other parts of the globe.

BIS in January had said it would launch new
projects into central bank digital currencies (CBDCs), next generation payments
systems and decentralized finance (DeFi) this year.

The bank also announced the appointment of Raphael Auer as the head of the BIS Innovation Hub Eurosystem Centre.

It also said its work programme would see
new projects on green finance, regulatory and supervisory technology, and cyber
security.

This included the first projects for the London
and Stockholm Centers.

‘First Three Projects’

BIS Innovation Hub in a press statement released on Friday explained that the goal of
the first project is to create an open-source cryptocurrency intelligence
platform that will provide more transparency on market capitalization, economic
activity, and risks to financial stability.

It explained that the collapse of many stablecoins
and DeFi lending platforms have exposed the difficulty in assessing their risks
and economic potential.

“One reason is that most data on asset backing,
trading volumes and market capitalization is self-reported by unregulated
firms. Individual datasets and commercially available solutions do not provide
comprehensive insights and lack transparency,” the Hub explained.

On the other hand, BIS said the second project
has been designed to investigate and test potential cryptographic solutions
that can withstand the vastly improved processing power of quantum computers.

The goal, according to the Hub, is to test use
cases in various payment systems and examine how the introduction of
quantum-resistant cryptography will affect their performance.

BIS explained, “Quantum computers may be capable
of breaking the cryptography used by central banks and the private financial
sector to secure payment and settlement systems.

“This threatens confidentiality and could
undermine the integrity of payments systems.

“Given the long-term sensitivity of financial
data, this vulnerability must be addressed well in advance of the advent of
quantum computing.”

Additionally, the Hub noted that the third project will help to
close important data gaps and inconsistencies in data collection for climate sustainability.

This will help ease the duty of
central banks who are increasingly looking into how climate change may affect
financial stability, inflation, and other issues within their mandate, the Hub noted.

“This project aims to build an open-source
database of corporate reports coupled with a full-text search engine to
identify sustainability-related disclosures,” it said.

“Machine learning and natural language
processing tools will then be used to organize and structure this data,” it
added.

Meanwhile, the BIS Innovation Hub also said its Hong Kong Centre will partner with the Bank of Israel and the Hong
Kong Monetary Authority (HKMA) on a new study on CBDCs and cybersecurity.

“Building on the Bank of Israel’s strengths in
cyber security and on the HKMA learnings from the earlier Aurum project, Sela
will explore technological solutions to allow intermediaries to provide CBDCs
to users without the related financial exposure, reducing risks and costs in
the process, combined with a strong focus on cyber security,” it explained.

The Bank for International Settlements (BIS)
Innovation Hub’s Eurosystem Centre will work on three initial
projects upon launch “in the coming months”.

The Centre is expected to be launched across locations in Frankfurt, Germany; and
Paris, France.

These projects are centered on cryptocurrency
market intelligence, securing the privacy of payments security, and bridging
data gaps related to climate change discourses.

The assigned undertakings of the Eurosystem
Centre are part of the new set of projects the BIS Innovation Hub
announced on Friday across its various centres.

They are part of updates to the Hub’s 2022 work
programme.

The BIS has innovation hubs in Switzerland, Hong Kong, Singapore, Sweden and other parts of the globe.

BIS in January had said it would launch new
projects into central bank digital currencies (CBDCs), next generation payments
systems and decentralized finance (DeFi) this year.

The bank also announced the appointment of Raphael Auer as the head of the BIS Innovation Hub Eurosystem Centre.

It also said its work programme would see
new projects on green finance, regulatory and supervisory technology, and cyber
security.

This included the first projects for the London
and Stockholm Centers.

‘First Three Projects’

BIS Innovation Hub in a press statement released on Friday explained that the goal of
the first project is to create an open-source cryptocurrency intelligence
platform that will provide more transparency on market capitalization, economic
activity, and risks to financial stability.

It explained that the collapse of many stablecoins
and DeFi lending platforms have exposed the difficulty in assessing their risks
and economic potential.

“One reason is that most data on asset backing,
trading volumes and market capitalization is self-reported by unregulated
firms. Individual datasets and commercially available solutions do not provide
comprehensive insights and lack transparency,” the Hub explained.

On the other hand, BIS said the second project
has been designed to investigate and test potential cryptographic solutions
that can withstand the vastly improved processing power of quantum computers.

The goal, according to the Hub, is to test use
cases in various payment systems and examine how the introduction of
quantum-resistant cryptography will affect their performance.

BIS explained, “Quantum computers may be capable
of breaking the cryptography used by central banks and the private financial
sector to secure payment and settlement systems.

“This threatens confidentiality and could
undermine the integrity of payments systems.

“Given the long-term sensitivity of financial
data, this vulnerability must be addressed well in advance of the advent of
quantum computing.”

Additionally, the Hub noted that the third project will help to
close important data gaps and inconsistencies in data collection for climate sustainability.

This will help ease the duty of
central banks who are increasingly looking into how climate change may affect
financial stability, inflation, and other issues within their mandate, the Hub noted.

“This project aims to build an open-source
database of corporate reports coupled with a full-text search engine to
identify sustainability-related disclosures,” it said.

“Machine learning and natural language
processing tools will then be used to organize and structure this data,” it
added.

Meanwhile, the BIS Innovation Hub also said its Hong Kong Centre will partner with the Bank of Israel and the Hong
Kong Monetary Authority (HKMA) on a new study on CBDCs and cybersecurity.

“Building on the Bank of Israel’s strengths in
cyber security and on the HKMA learnings from the earlier Aurum project, Sela
will explore technological solutions to allow intermediaries to provide CBDCs
to users without the related financial exposure, reducing risks and costs in
the process, combined with a strong focus on cyber security,” it explained.



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