Yes…and no. The technology itself offers a number of security benefits over current systems but the introduction of any new technology brings risk…:
Moreover, the effectiveness of these existing rules—which were not designed for blockchain technology specifically—are often broad enough to cover this new technology. With this in mind, we argued that the following recommendations for policymakers and industry participants provide a framework for a smart and coordinated approach to promoting the development of secure blockchain applications through workable cybersecurity standards.
- Apply a Tailored Version of the NIST Cybersecurity framework to permissioned blockchain activities. Financial Services Industry participants should optimize the framework for permissioned blockchains by shifting the focus from organization or enterprise-level cybersecurity to network-level cybersecurity.
- Encourage regulator-industry dialogue, including through regulatory sandboxes. For regulators to understand cybersecurity risk in permissioned blockchains, they first must have a detailed understanding of the technologies and how they operate. Industry participants can help provide this understanding by maintaining an open dialogue with regulators regarding permissioned blockchains, their opportunities, and their risks.
- Encourage policymakers to acknowledge the unique cybersecurity benefits of blockchain technologies. While blockchain technologies are continuing to evolve for an expanding range of applications and industries, policymakers should be attuned to these technologies’ unique benefits, including cybersecurity benefits.
- Foster harmonization across cybersecurity standards applied to permissioned blockchains. Convening interagency councils and public-private governing bodies is a helpful step to making sure that cybersecurity guidance applicable to blockchain technology is consistent and does not impede innovation.
Protecting Customers’ Information
The financial services industry stands to benefit tremendously from the growth of blockchain given the technology’s many financial services applications. As cyber threats to the industry continue to evolve in complexity and intensity, emerging technologies, such as permissioned blockchains, can contribute to the important goals of reducing cybersecurity risk and adequately protecting consumers’ financial information and the integrity of the global financial system.
Permissioned blockchains offer significant cybersecurity capabilities, share some of the same cyber risks that affect other IT systems, and have unique characteristics, all of which merit further consideration and evaluation by governments and industry.