The World Economic Forum (WEF) has recently issued a strong warning about the potential vulnerability of central bank digital currencies (CBDCs) to decryption attacks from quantum computers. Quantum computers are still in the experimental phase, with a few proofs-of-concept and a handful of laboratories claiming to have solved problems that traditional computers couldn’t. However, there is still time before quantum computers can crack standard encryption. While this threat to encryption would impact all industries, the digital asset sector faces a significant challenge. The WEF states that this threat could “break” CBDCs. In a blog post on May 21, the WEF emphasized the need for central banks to embed cryptographic agility into CBDC systems to defend against quantum cyberattacks targeting payment infrastructure. It is important to note that there is no consensus among physicists on when quantum computers will become a threat to current encryption methods. The WEF has identified three specific threats to CBDCs that quantum computing could pose. Firstly, quantum computers could break “in motion encryption,” allowing bad actors to intercept transactions. Secondly, identity impersonation could occur by using quantum systems to break encryption protecting identity verification systems. Finally, the most commonly cited threat is “Harvest now, decrypt later,” where bad actors steal encrypted data to be decrypted by a future quantum system. To mitigate these threats, the WEF recommends building CBDCs with quantum-proof protections through a methodology called “cryptographic agility.”
Quantum Computer Threat Poses Vulnerability to CBDCs, WEF Cautions