Template-type: ReDIF-Paper 1.0
Author-Name: Grace Cimaszewski
Author-Name-First: Grace
Author-Name-Last: Cimaszewski
Author-Name: Francesco Da Dalt
Author-Name-First: Francesco
Author-Name-Last: Da Dalt
Author-Name: Thomas Moser
Author-Name-First: Thomas
Author-Name-Last: Moser
Author-Person: pmo1198
Author-Name: Adrian Perrig
Author-Name-First: Adrian
Author-Name-Last: Perrig
Title: SCION and cross-border payments: Enhancing security and compliance in distributed ledger networks
Abstract: Cross-border payments remain expensive, slow, and opaque due to reliance on correspondent banking. Distributed ledger technology (DLT) offers a possible alternative, enabling peer-to-peer transactions at lower cost with greater speed, transparency, and resilience. However, DLT systems largely rely on the public Internet, which exposes them to network-based outages and attacks. SCION, a secure next-generation Internet architecture, can operate side-by-side with today's Internet to mitigate network-related risks. In addition to the security benefits, SCION also provides a novel approach to enforce regulatory compliance on a permissionless DLT with a governance model well-suited for multi-jurisdictional platforms. We present the first practical blueprint for deploying a DLT-based settlement system on SCION and demonstrate, through a simulation-based analysis of the real-world DLT system Sui, that SCION can mitigate more than half of routing-based network attacks, even when only partially adopted by DLT validators. Overall, SCION can provide a robust infrastructure foundation for DLT-based cross-border payment systems by enhancing their security, reliability, and regulatory compliance.

Length: 15 pages
Creation-Date: 2025
Contact-Email: forschung@snb.ch
File-URL: https://www.snb.ch/en/publications/research/working-papers/2025/working_paper_2025_15
File-Format: text/html
Number: 2025-15
Classification-JEL: E42, F33, G21
Keywords: DLT reliability, DLT availability, Network attacks, Routing attacks, DDoS
Handle: RePEc:snb:snbwpa:2025-15