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On July 7, the Bank for International Settlements (BIS), a financial institution owned by constituent central banks, published<\/a> a framework for defending central bank digital currencies (CBDCs) against cybersecurity threats. The BIS wrote:<\/p>\n \u201cRecent 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.\u201d<\/p><\/blockquote>\n In its report, the BIS said security frameworks should safeguard the confidentiality, integrity and availability of CBDC transactions. By design, CBDCs must be able to scale dynamically to respond to a sudden surge in transaction volumes, have no single points of failure, operate 24\/7 without outages and function even if their underlying financial institution experiences an outage. Furthermore:<\/p>\n \u201cTo organize the control objectives that have been identified and adapted for CBDC systems, this framework […] has seven steps: Prepare, Identify, Protect, Detect, Respond, Recover and Adapt.”<\/p><\/blockquote>\n Together, the seven procedures translate into 104 control objectives, such as “24\/7 monitoring and alerting function,” doing due diligence “on the security of cryptographic keys,” and “using a DDoS protection service” to alleviate network traffic volume. To execute the framework, BIS called for the establishment of a central bank senior leadership and board, a chief security officer and various information technology, security and stakeholder teams.<\/p>\n Although cautious about decentralized finance, BIS has been adamantly supporting the adoption of CBDCs. On June 20, the financial organization published a unified-ledger proposal<\/a> for cross-border and tokenized asset transactions. In April, BIS concluded a distributed ledger technology plot<\/a> with the Bank of England.<\/p>\n