How does post-quantum cryptography affect Central Bank Digital Currency?

TL;DR

This paper examines how the advent of quantum computing threatens the cryptographic security of CBDC systems and proposes strategies for upgrading to post-quantum cryptography to ensure future resilience.

Contribution

It analyzes the vulnerabilities of current cryptographic algorithms in CBDC and offers a detailed strategy for transitioning to post-quantum cryptography.

Findings

Certain cryptographic assets in CBDC are vulnerable to quantum attacks.

Post-quantum algorithms can be integrated into CBDC systems.

An upgrade strategy for CBDC cryptography is proposed.

Abstract

Central Bank Digital Currency (CBDC) is an emerging trend in digital payments, with the vast majority of central banks around the world researching, piloting, or even operating a digital version of cash. While design choices differ broadly, such as accounts vs. tokens, the wallets are generally protected through cryptographic algorithms that safeguard against double spending and ensure non-repudiation. With the advent of quantum computing, these algorithms are threatened by new attack vectors. To better understand those threats, we conducted a study of typical assets in a CBDC system, describe which ones are most amenable to post-quantum cryptography, and propose an upgrade strategy.