FRB Crypto Systems

Federal Register, November 10, 1997

Excerpt from a Federal Reserve Bank announcement:

      ... the Reserve Banks plan to change their policy 
for ownership of the encryption boards used by depository 
institutions with dial and multi-drop connections. These 
encryption boards are currently purchased and owned by the 
depository institutions. With the replacement of the 
encryption boards beginning in the second half of 1998 to 
enhance the security of the Federal Reserve's communications 
network, the Reserve Banks plan to purchase and assume 
ownership of these boards. This approach is consistent with 
Reserve Bank ownership of other equipment at depository 
institutions that is required for electronic connections to 
the Federal Reserve, specifically link encryptors and 
signaling equipment. Reserve Bank ownership should improve 
management of the security of the network and facilitate the 
implementation of an all-electronic key distribution system. 
This change in policy may affect future-year electronic 
connection fees, as priced services must recover depreciation 
costs associated with the new encryption boards.

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Are these systems related to Kawika Daguio's comments on
PCCIP forwarded by Declan yesterday? Anyone have more
detailed info on the boards and link encryptors?

On Tue, 11 Nov 1997, John Young wrote:
[On hardware crypto used in banking].

> Are these systems related to Kawika Daguio's comments on
> PCCIP forwarded by Declan yesterday? Anyone have more
> detailed info on the boards and link encryptors?

The hardware crypto used by banking networks is universally
underperforming and overpriced. As the leading vendor is losing market
share due to the fact that customers are starting to wonder why they are
paying $5-10k for a device that is outperformed by a Pentium 90, some
enterprising vendor of such devices has aparently convinced the Fed to
help him elimiate  competition by means of regulations. Your basic
government contract con job.

-- Lucky Green <shamrock@cypherpunks.to> PGP v5 encrypted email preferred.
   "Tonga? Where the hell is Tonga? They have Cypherpunks there?"