Digital Money: Operational Risks and the Threats to Operational Resilience
First published:
ISBN: 9781782724506
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How digital money creates new operational risks
Introduction: Money is information on the move
Trends in digital money
How digital money creates new operational risks
Operational risk and cryptography
Operational risks of digital money
Commercial bank digital money
Private digital money, including cryptocurrencies
Public digital money, including CBDCs
Chapter 2 describes how the trend towards digital money will impact operational risks for financial institutions, creating an environment that is all the following.
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More complex: As new technologies and processes must be integrated into existing systems and processes.
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More volatile: As innovations in digital money emerge, adapt and sometimes disappear, systems and processes will have to be continually modified.
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Real time: With digital money, systems and processes will have to move towards true real-time operations, which will undoubtedly involve significant changes to systems and hence increased operational risks and decreased operational resilience.
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Always on: With digital money, systems and processes will have to move towards true 24/7 operations, and this will be a difficult transition for existing systems.
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Global: Unlike traditional money, digital money will be international from day one, as investors and money launderers will be able to move easily from traditional to digital forms of money across international borders.
TECHNOLOGY HAS MADE THE FINANCIAL WORLD A NEW PLACE
Although it is just over half a century ago, the financial world in the 2020s is vastly different to that of
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