The International Telecommunication Union (ITU) has begun a global process to standardise the use of crypto-currency, stablecoins and central bank digital currencies (CBDCs).
Last week, the ITU hosted a three-day conference to discuss how CBDCs and stablecoins can bring efficiency to financial inclusion and payment systems.
The gathering also sought to identify common patterns in digital architecture that could become areas for global standardisation.
The ITU said standards development needs to be influenced by all players in the ecosystem – all the communities and organisations that will come to rely on the resulting standards − hence it hosted the DC³ Conference.
The conference highlighted progress in standards development for digital currencies and also facilitated the sharing of insights from around the world on emerging industry trends and pilot digital currencies, including CBDCs.
“Money as we know it is transforming. Digital currency offers promising ways to make transactions more secure and cost-effective. It has great potential, also, to boost financial inclusion for the unbanked,” said Chaesub Lee, director, telecommunication standardisation bureau, ITU.
“Technical standards developed by the ITU can help us tap into this opportunity on a global scale.”
The current initiative by the ITU spans three working groups: one for architecture, interoperability and use cases; another studying policy and governance questions; and another focused on security and assurance.
According to Lee: “All three aim to identify where technical standards are needed for digital currencies, helping to ensure ITU standards meet those needs.
“Collaboration among different standards bodies will play a role in ensuring comprehensive standardisation solutions for digital currencies.”
Bilel Jamoussi, chief of study groups at the ITU telecommunication standardisation bureau, commented: “The key is dialogue among digital ecosystem stakeholders and regulators on lessons learned from crypto-currency pilots.”
Participants of the DC³ Conference also heard how with malware and ransomware attacks growing increasingly frequent, trust and security are of chief importance when it comes to the standardisation of digital currencies.
“We have yet to determine how to best protect consensus mechanisms,” said Jacques Francoeur, founder of advocacy group Security Inclusion Now and leader of the DCGI security and assurance working group.
“Today, security is very complex, costly, manual and fragmented. Though myriad security standards exist, small fintech companies often find them nearly impossible to deal with.”
To manage this problem, Francoeur’s working group developed a security validation platform specifically designed for digital currencies.
He said it starts by identifying commonalities between digital currencies and understanding which areas can be treated with “a prescribed set of security controls”.
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