Ignoring quantum threats in CBDC design is reckless
The real threat of a CBDC lies in quantum computing vulnerabilities. Developing a quantum-resistant design should be a priority for the United States.
In a newly released and otherwise crypto-friendly portion of its 2024 platform, the Republican Party echoed a common concern about a potential United States central bank digital currency (CBDC): the possibility that this might take the form of a privacy-invading state surveillance mechanism. What we should be more concerned about is a CBDC built on technical rails that can be infiltrated and exploited by our adversaries.
Despite political opposition, a CBDC in this country is a realistic future possibility. Interest is growing steadily among central banks and financial institutions worldwide. Designing one that is resilient to a cyberattack based on what’s known as Shor’s algorithm — a powerful tool set to become much more practical as quantum computing takes hold in the coming years — is a matter of vital interest. Without post-quantum technology underpinning the future of our monetary system, the country’s economic security and financial privacy is vulnerable to foreign interference.
As a digital liability of the Federal Reserve, a CBDC would be comparable to a digital version of a dollar bill. From a credit and liability risk standpoint, such an innovation would be the safest of its kind in the kaleidoscope of digital assets available to the general public. In theory, it would exist alongside fiat currency, commercial bank money, and privately issued digital assets, thereby adding a weighty, government-backed option to a diversity of payment choices for the public.
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Author: Agnes Gambill
