> Encryption isn’t enough to protect data wherever it goes 

Cybersecurity policy has long treated data protection as a systems problem: encrypt the database, secure the network, restrict access, monitor activity, and keep attackers out. All of that still matters. But those defenses have a major blind spot. Once inside the wall the data itself is at risk. Every time data is used, copied, or moved, the risk that a malicious actor will steal and expose the data significantly increases. Policymakers need to consider a tested method that reduces the value of sensitive information if it compromised. Hospitals, banks, defense contractors and government agencies cannot operate on permanently unreadable data. They need to process records, share information, analyze intelligence and prepare data for artificial intelligence models. The reality is data moves. It travels through cloud platforms, vendors, backups, analytics tools, payment processors, software services, AI pipelines, and partner systems. Every handoff creates another place where information can be copied, cached, logged, and indexed, and another place where it can be mishandled or stolen. This is the gap encryption does not close. Encryption protects data when it is stored or traveling, only partially protects it when it is transmitted, and does not protect data at all when it is processed. Once an authorized system decrypts information so someone can use it, the data becomes readable again. The defenses have not reduced the sensitivity of the information. If an adversary steals unencrypted data — or decrypts stolen data at a later date when quantum computers are readily available — the adversary now has the sensitive information. All told, encryption is essential, but it’s also not enough. Washington needs to take that seriously. One promising answer is vaultless, keyless pseudonymization. The phrase sounds technical, but the idea is straightforward: replace sensitive values with realistic substitutes before the data spreads. A name becomes another name. A Social Security number becomes another valid-looking Social Security number. A payment card number, patient identifier, or address keeps the same basic format. Databases, billing platforms, and analytics tools can still process the record because it looks structurally familiar. But the identity is no longer exposed to every vendor, platform, or downstream user that touches it. That is a different mindset from the one that dominates cybersecurity policy. We spend enormous energy trying to protect every system that might handle sensitive data. We should keep doing that. But in a world of cloud services, supply chains and AI systems that retain information in hard-to-track ways, perfect control over every downstream system is more difficult than ever. The question is no longer only about securing systems but also about making exposed or stolen data less useful to threat actors if they acquire it through any means. Traditional tokenization models swap out real values for “token” terms and store original values — like names, passwords and credit card numbers — in a central vault. That can reduce exposure, but it creates an obvious target. If the vault itself is accessed, the sensitive values behind the tokens may be exposed. Vaultless, keyless pseudonymization is designed to remove the single point of failure created by a central vault or master key. In a model assessed by our Transformative Cyber Innovation Lab at the Foundation for Defense of Democracies, the protected data could be restored only when the required parties authorized it under controlled conditions; no one party could reverse the pseudonymized tokens on its own. The test showed the approach could preserve the format of sensitive contents while limiting access to the real values behind them. Unauthorized restoration attempts failed and were logged. Multi-party stakeholder authorized restoration returned the correct values. Intercepted tokens did not reveal the original data value. And the system contained a unique ability to revoke access to the token — regardless of where it exist — by cutting off downstream re-identification. The assessment showed promise that sensitive data could remain useful for legitimate work while becoming far less valuable to attackers and unauthorized users. Using vaultless, keyless pseudonymization can significantly reduce the impact of a data breach or ransomware attack if the stolen or exposed data has no intrinsic value.  The federal government should evaluate this methodology to assess what is required to make it work in live, real-world operations. Right now, agencies may be inclined to ignore this type of technology simply because it does not fit neatly into existing categories for encryption, access control, or other cybersecurity processes. This is a mistake.    The National Institute of Standards and Technology should evaluate what the technology does, what risks it reduces, what new dependencies it introduces, and what evidence is required before it can be trusted in practice. NSA should examine the same questions for classified networks.  Procurement regulations should also get smarter. Vendors claiming tokenization, pseudonymization, data-layer protection or quantum-resilient properties should have to explain whether raw data enters their infrastructure, whether any token-to-source mapping exists, who can restore original values and what independent review has been completed. Cybersecurity policy has spent decades trying to keep attackers out. That work will never end. But we need this second objective: make sensitive data less damaging when it inevitably escapes.  The post Encryption isn’t enough to protect data wherever it goes  appeared first on CyberScoop.