The Bank for International Settlements (BIS) Innovation Hub is set to embark on new ventures in digital finance, advancing into the next phase of privacy testing for central bank digital currencies (CBDCs) and initiating a blockchain-based tokenization project in 2024. This move aligns with BIS’s commitment to modernizing global financial systems through innovative technology.
In a recent announcement, the BIS detailed its 2024 agenda, highlighting six key projects focusing on diverse areas such as cybersecurity, combating financial crimes, green finance, and notably, CBDCs. Cecilia Skingsley, head of the BIS Innovation Hub, emphasized the importance of these initiatives, particularly in the realm of tokenization, with Project Promissa leading the charge.
Project Promissa, a joint effort by the BIS, the Swiss National Bank, and the World Bank, aims to digitize traditional promissory notes, which are currently predominantly paper-based. This project seeks to establish a digital platform for tokenized promissory notes, setting the stage for a more streamlined and modern financial instrument by early 2025.
Simultaneously, the BIS is collaborating with the Hong Kong Monetary Authority on Project Aurum, targeting the enhancement of privacy in retail payments through CBDCs. This follows the successful development of a wholesale interbank system and a prototype for retail CBDCs in 2022.
Additionally, the BIS has introduced four other projects – Project Leap, Project Symbiosis, Project Hertha, and Project NGFS Data Directory 2.0 – although these do not directly intersect with digital assets.
The bank will also progress with Project Mandala, focusing on automating compliance for cross-border payments; Project Pyxtrail, which monitors asset-backed stablecoins; and Project Cambridge, experimenting with a multi-CBDC platform for international payments.
As a prominent advocate for CBDCs and critic of stablecoins, the BIS, through its general manager Agustín Carstens, continues to encourage central banks globally to lead in digital innovation, positioning CBDCs as a pivotal element in this new era of financial technology.