BIS develops tech investigating crypto and quantum risk

The Bank for International Settlements (BIS) Innovation Hub is developing a crypto market intelligence platform and testing cryptographic solutions that can tackle the privacy risks of quantum computing.

The organisation says that the collapse of many stablecoins and DeFi lending platforms has revealed the difficulty in assessing their risks, largely because most data on asset backing, trading volumes, and market capitalisation is self-reported by unregulated firms.

BIS is creating an open-source market intelligence platform to investigate market capitalisations and risks to financial stability.

It’s also testing potential cryptographic solutions which can withstand the “vastly improved” processing power of quantum computers. BIS says that quantum computers now may be able to break the cryptography used by central banks and the private financial secure payment and settlements systems, which it explained can threaten the confidentiality of payments systems.

The financial institution is also exploring technology that would enable intermediaries to provide CBDCs to users without the related financial exposure, in an attempt to reduce risks and costs in the process and focus on cyber security. It said it would build on the Bank of Israel’s strengths in cyber security and on Hong Kong Monetary Authority (HKMA) learnings from a previous project.

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