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September 01, 2022
🌐CBDCs may pose security risks, but responsible design can turn them into opportunities🌐

In the typically cautious world of central banking, the idea of a central bank digital currency (CBDC) is moving at lightning speed. Atlantic Council GeoEconomics Center research shows that 105 countries and currency unions are currently exploring the possibility of launching a CBDC, either retail—issued to the general public—or wholesale, used primarily for interbank transactions. That’s up from an estimated 35 as recently as 2020. It is not just smaller economies that are interested, either; 19 Group of Twenty (G20) countries are considering issuing CBDCs, and the majority have already progressed beyond the research stage.

But as more countries launch CBDC pilot projects, concerns about cybersecurity and privacy loom large. Federal Reserve Chair Jerome Powell recently listed “cyber risk” as his number one worry relating to financial stability, and a recent UK House of Lords report specifically described cybersecurity and privacy risks as potential reasons not to develop a CBDC.

These concerns are not unfounded. CBDC vulnerabilities could be exploited to compromise a nation’s financial system. CBDCs would be able to accumulate sensitive payment and user data at an unprecedented scale. In the wrong hands, this data could be used to spy on citizens’ private transactions, obtain security-sensitive details about individuals and organizations, and even steal money. If implemented without proper security protocols, a CBDC could substantially amplify the scope and scale of many of the security and privacy threats that already exist in today’s financial system.

Technology enables central banks to ensure that both cybersecurity and privacy protection are embedded in any CBDC design.
Until recently, little work had been done publicly in the cybersecurity and central banking world to actually understand the specific cybersecurity and privacy risks associated with CBDCs. Few have considered whether CBDC designs could mitigate risks or perhaps even improve the cybersecurity of a financial system.

Our new research, published in the Atlantic Council’s recent report, titled “Missing Key–The Challenge of Cybersecurity and CBDCs,” analyzes the novel cybersecurity risks CBDCs may present for financial systems and makes the case that policymakers have ample options to safely introduce CBDCs. There are many design variants for CBDCs, ranging from centralized databases to distributed ledgers to token-based systems. Each design needs to be considered before reaching conclusions about cybersecurity and privacy risks. These designs also need to be compared with the current financial system—the one that keeps Powell up at night—to determine if new technology could deliver safer options.

So what are some of the main new cybersecurity risks that could arise in a CBDC? And more important, what can be done to mitigate these risks?

Centralized data collection
Many of the proposed design variants for CBDCs (particularly retail CBDCs) involve the centralized collection of transaction data, posing major privacy and security risks. From a privacy standpoint, such data could be used to surveil citizens’ payment activity. Accumulating so much sensitive data in one place also increases security risk by making the payoff for would-be intruders much greater.

However, the risks associated with centralized data collection can be mitigated either by not collecting it at all or by choosing a validation architecture in which each component sees only the amount of information needed for functionality. The latter approach can be aided by cryptographic tools, such as zero-knowledge proofs, which authenticate private information without revealing it and allowing it to be compromised, or cryptographic hashing techniques. For example, Project Hamilton (a joint effort by the Boston Federal Reserve and the Massachusetts Institute of Technology to explore a US CBDC) has designed a system that separates transaction validation into phases, and each phase requires access to different parts of the transaction data.

These cryptographic techniques can be extended even further to build systems that verify transaction validity with only encrypted access to transaction details like sender, receiver, or amount. While these tools sound too good to be true, they have been tested extensively in privacy-preserving cryptocurrencies such as Zcash and are based on significant advances in the cryptography community. The bottom line is that technology enables central banks to ensure that both cybersecurity and privacy protection are embedded in any CBDC design.

Transparency vs privacy
A common concern with privacy-preserving designs (including those that use specialized cryptographic techniques) is reduced transparency for regulators. Regulators generally require enough insight to identify suspicious transactions, enabling them to detect money laundering, terrorism financing, and other illicit activities.

International standard-setting and more knowledge sharing between banks is critical at this moment of rapid development and adoption.
But even this is not an either/or decision. Cryptographic techniques can be used to design CBDCs that provide cash-like privacy up to a specific threshold (for example, $10,000) while allowing government authorities to exercise sufficient regulatory oversight. This kind of threshold is not so different from the current system in the United States, which allows reduced reporting for transactions under $10,000. The reality is that in many ways, a new CBDC system would not need to reinvent security protocols but could instead improve on them.

Several countries have committed to or even deployed retail CBDCs whose underlying infrastructure is based on distributed ledger technology. Nigeria’s eNaira, launched in October 2021, is a good example. Such designs require the involvement of third parties as validators of transactions. This introduces a new role for third parties (for example, financial and nonfinancial institutions) in central bank money operations. Critically, the security guarantees of the ledger would depend on the integrity and availability of third-party validators, over which the central bank may not have direct control. (Although it is possible to implement distributed ledger technology with all validators controlled by the central bank, doing so largely defeats the purpose of using the technology.) The associated risks can potentially be mitigated through regulatory mechanisms such as auditing requirements and stringent breach disclosure requirements. However, there is not a clear blueprint for devising these regulations in a system as time-sensitive and closely interconnected as a distributed-ledger-based CBDC. This is why the need for international standard-setting and more knowledge sharing between banks is critical at this moment of rapid development and adoption.

Threat or opportunity?
Over the past 18 months some central banks have prematurely decided that a CBDC poses too many cybersecurity and privacy risks. We wanted to determine what is truly a threat and what is actually an opportunity. We concluded that governments have many CBDC design options to choose from, including new variants that have not yet been fully tested in current central bank pilots. These variants present different trade-offs in terms of performance, security, and privacy. Governments should choose a design option based on a country’s needs and policy priorities. Based on our evaluation of these trade-offs, CBDCs are not inherently more or less secure than existing systems. While responsible designs must take cybersecurity into account, that should not prevent consideration of whether to design and test a CBDC in the first place.

One thing is abundantly clear in our research. Fragmented international efforts to build CBDCs are likely to result in interoperability challenges and cross-border cybersecurity risks. Countries are understandably focused on domestic use, with too little thought for cross-border regulation, interoperability, and standard-setting. Regardless of whether the United States decides to deploy a CBDC, as issuers of a major world reserve currency, the Federal Reserve should help lead the charge toward development of global CBDC regulations in standard-setting bodies. International financial forums, including the Bank for International Settlements, IMF, and G20 have a similarly critical role to play.

CBDCs’ cybersecurity and privacy risks are real. But solutions to these challenges are within the grasp of technologists and policymakers. It would be unfortunate to preemptively decide the risks are too high before developing solutions that could actually help deliver a more modern and stable global financial system.

https://www.imf.org/en/Publications/fandd/issues/2022/09/Central-bankers-new-cybersecurity-challenge-Fanti-Lipsky-Moehr

CBDC TRACKER: https://www.atlanticcouncil.org/cbdctracker/

Fanti.pdf
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Trump just posted this about chemtrails 👀

“The enthusiasm for experiments that would pump pollutants into the high atmosphere has set off alarm bells here at the TRUMP EPA.”

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The future of crypto = access, trust, transparency.

@evernorthxrp gives institutional + public investors simple, regulated, liquid exposure to XRP – and we’re compounding that value.

Watch below to learn how. 🎥👇

OP: @Ashgoblue

00:01:32
Coinbase CEO Brian Armstrong on CNBC: Crypto Market Structure Bill is CLOSE to passing 👀
00:00:39
👉 Coinbase just launched an AI agent for Crypto Trading

Custom AI assistants that print money in your sleep? 🔜

The future of Crypto x AI is about to go crazy.

👉 Here’s what you need to know:

💠 'Based Agent' enables creation of custom AI agents
💠 Users set up personalized agents in < 3 minutes
💠 Equipped w/ crypto wallet and on-chain functions
💠 Capable of completing trades, swaps, and staking
💠 Integrates with Coinbase’s SDK, OpenAI, & Replit

👉 What this means for the future of Crypto:

1. Open Access: Democratized access to advanced trading
2. Automated Txns: Complex trades + streamlined on-chain activity
3. AI Dominance: Est ~80% of crypto 👉txns done by AI agents by 2025

🚨 I personally wouldn't bet against Brian Armstrong and Jesse Pollak.

👉 Coinbase just launched an AI agent for Crypto Trading
Pyth 🤝 Hyperliquid

The HIP-3 Ecosystem Map:

Full report and projection of year one HIP-3 volumes dropping tomorrow on @MessariCrypto

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🚨JUST IN: POLYMARKET TO LAUNCH A TOKEN!

CMO Matthew Modabber confirms a native $POLY token and airdrop. Polymarket is eyeing a new funding round valuing it up to $15B.

⚡ BREAKING: GOOGLE’S WILLOW QUANTUM PROCESSOR COMPLETES 3.2 YEARS OF COMPUTATION IN JUST 2 HOURS, 13,000× FASTER THAN THE WORLD’S MOST POWERFUL SUPERCOMPUTER, SPARKING FRESH CONCERNS OVER BITCOIN’S ENCRYPTION SECURITY.

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New Human Force
Join this Now! YOU have what it takes!

They are in our solar system, and in our event-stream in this Eternal Now.

Officialdom is clueless.

They think we are going to be at WAR with the Aliens.

Officialdom is very stupid.

Aliens is here. It’s not WAR. It’s Contention.

There is a difference.

Officialdom is clueless, still living in the last Millennium.

Aliens is here.

The Field in which we contend is This Eternal Now.

ALL HUMANS LIVE HERE, and ONLY HERE, in this

ETERNAL NOW.

It’s a Field of potentials, of pending Manifestation, this continuous event-stream of karma in which we have always lived our body’s Life.

This Eternal Now has always been our body’s Field of Contention.

The Aliens is here, in our Eternal Now.

Our common, shared, reality that we all continuously co-create now has Aliens.

It’s getting very complex in here.

Officialdom is clueless. They see the Aliens. They are freaking out. They think you are children, when it is their small minds, trapped in a reality that is only grit, mud, and ‘random chance’ who are childish.

Officialdom is stupid. They will and are reacting badly. As is their way, they are trying to hide shit from you. Silly grit bound minds don’t realize you can see everything from within the Eternal Now. They have yet to grasp that what they perceive as this Matterium, filled with ‘matter’, is but a hardening of our previous (past) internal states of being.

WAR happens in the Matterium.

Contention occurs within this Eternal Now where Consciousness shapes the manifesting event-stream.

YOU know this to be fact. You are a co-creator.

Contention with Aliens is happening in this instant in this Eternal Now.

Officialdom ain’t doing shit. They are still stuck in trying to move matter around to affect unfolding circumstances. That’s redoing the mirror trying to affect the reflection. Dumb fucks….

It’s up to US. To the New Humans. Those of us who live in this Eternal Now. Those of us who see that our body’s Lives (the Chain that cannot be broken) are expressions of the Ontology revealing itself to itself. It’s up to us guys.

We are not an Army. That’s a concept from the past, from before the emergence of the New Humans. We are a Force. A self-organizing collective with leadership resident in each, and every participant.

We are the New Human Force. By the time officialdom starts to speak about the Aliens in near-factual terms, we will already be engaging them in this Eternal Now.

By the time officialdom begins to move matter around (space ships & such) thinking it’s War, we will already be suffering casualties in this Eternal Now. That part is inevitable. It’s how we learn.

By the time officialdom realizes that some shit is going on in places and ways beyond its conception, we will already be pushing our dominance onto our partners in this First Contention, the Aliens. Nage cannot train without Uke.

Just as officialdom is scrambling to research the Ontology, this Eternal Now, and the event-stream, we will be settling terms with our new partners, the Aliens.

Come, join with us. It’s going to be a hellacious Contention.

We ARE the NEW HUMANS!

Together we are the Force that cannot be defeated.

Start YOUR training in this instance of this Eternal NOW.

Consume Neville Goddard videos as though all of human existence depended on YOUR mind and YOUR active, effective, imaginings!

It’s not a question of Mind over Matter as there is only Mind and it cares not for Matter. That’s residue.

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The Great Onboarding: US Government Anchors Global Economy into Web3 via Pyth Network

For years, the crypto world speculated that the next major cycle would be driven by institutional adoption, with Wall Street finally legitimizing Bitcoin through vehicles like ETFs. While that prediction has indeed materialized, a recent development signifies a far more profound integration of Web3 into the global economic fabric, moving beyond mere financial products to the very infrastructure of data itself. The U.S. government has taken a monumental step, cementing Web3's role as a foundational layer for modern data distribution. This door, once opened, is poised to remain so indefinitely.

The U.S. Department of Commerce has officially partnered with leading blockchain oracle providers, Pyth Network and Chainlink, to distribute critical official economic data directly on-chain. This initiative marks a historic shift, bringing immutable, transparent, and auditable data from the federal government itself onto decentralized networks. This is not just a technological upgrade; it's a strategic move to enhance data accuracy, transparency, and accessibility for a global audience.

Specifically, Pyth Network has been selected to publish Gross Domestic Product (GDP) data, starting with quarterly releases going back five years, with plans to expand to a broader range of economic datasets. Chainlink, the other key partner, will provide data feeds from the Bureau of Economic Analysis (BEA), including Real Gross Domestic Product (GDP) and the Personal Consumption Expenditures (PCE) Price Index. This crucial economic information will be made available across a multitude of blockchain networks, including major ecosystems like Ethereum, Avalanche, Base, Bitcoin, Solana, Tron, Stellar, Arbitrum One, Polygon PoS, and Optimism.

This development is closer to science fiction than traditional finance. The same oracle network, Pyth, that secures data for over 350 decentralized applications (dApps) across more than 50 blockchains, processing over $2.5 trillion in total trading volume through its oracles, is now the system of record for the United States' core economic indicators. Pyth's extensive infrastructure, spanning over 107 blockchains and supporting more than 600 applications, positions it as a trusted source for on-chain data. This is not about speculative assets; it's about leveraging proven, robust technology for critical public services.

The significance of this collaboration cannot be overstated. By bringing official statistics on-chain, the U.S. government is embracing cryptographic verifiability and immutable publication, setting a new precedent for how governments interact with decentralized technology. This initiative aligns with broader transparency goals and is supported by Secretary of Commerce Howard Lutnick, positioning the U.S. as a world leader in finance and blockchain innovation. The decision by a federal entity to trust decentralized oracles with sensitive economic data underscores the growing institutional confidence in these networks.

This is the cycle of the great onboarding. The distinction between "Web2" and "Web3" is rapidly becoming obsolete. When government data, institutional flows, and grassroots builders all operate on the same decentralized rails, we are simply talking about the internet—a new iteration, yes, but the internet nonetheless: an immutable internet where data is not only published but also verified and distributed in real-time.

Pyth Network stands as tangible proof that this technology serves a vital purpose. It demonstrates that the industry has moved beyond abstract "crypto tech" to offering solutions that address real-world needs and are now actively sought after and understood by traditional entities. Most importantly, it proves that Web3 is no longer seeking permission; it has received the highest validation a system can receive—the trust of governments and markets alike.

This is not merely a fleeting trend; it's a crowning moment in global adoption. The U.S. government has just validated what many in the Web3 space have been building towards for years: that Web3 is not a sideshow, but a foundational layer for the future. The current cycle will be remembered as the moment the world definitively crossed this threshold, marking the last great opportunity to truly say, "we were early."

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US Dept of Commerce to publish GDP data on blockchain

On Tuesday during a televised White House cabinet meeting, Commerce Secretary Howard Lutnick announced the intention to publish GDP statistics on blockchains. Today Chainlink and Pyth said they were selected as the decentralized oracles to distribute the data.

Lutnick said, “The Department of Commerce is going to start issuing its statistics on the blockchain because you are the crypto President. And we are going to put out GDP on the blockchain, so people can use the blockchain for data distribution. And then we’re going to make that available to the entire government. So, all of you can do it. We’re just ironing out all the details.”

The data includes Real GDP and the PCE Price Index, which reflects changes in the prices of domestic consumer goods and services. The statistics are released monthly and quarterly. The biggest initial use will likely be by on-chain prediction markets. But as more data comes online, such as broader inflation data or interest rates from the Federal Reserve, it could be used to automate various financial instruments. Apart from using the data in smart contracts, sources of tamperproof data 👉will become increasingly important for generative AI.

While it would be possible to procure the data from third parties, it is always ideal to get it from the source to ensure its accuracy. Getting data directly from government sources makes it tamperproof, provided the original data feed has not been manipulated before it reaches the oracle.

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XRP: r9pid4yrQgs6XSFWhMZ8NkxW3gkydWNyQX
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