The Bank for International Settlements (BIS) Innovation Hub is set to embark on the next phase of its central bank digital currency (CBDC) privacy research and initiate a new blockchain-based tokenization project in 2024.
On January 23, the BIS announced its work program for the year, highlighting six new projects. These projects focus on various areas including cybersecurity, combating financial crime, CBDCs, and green finance. Cecilia Skingsley, head of the BIS Innovation Hub, emphasized the importance of tokenization, with Project Promissa being a key initiative followed by more in the pipeline.
Project Promissa, a collaborative effort between the BIS, the Swiss National Bank, and the World Bank, aims to develop a proof-of-concept (PoC) for a platform handling digital tokenized promissory notes. Traditionally, promissory notes are paper-based financial instruments signifying a commitment to pay a specified sum of money at a set time. The BIS intends to complete this PoC by early 2025, transitioning these instruments to a digital format.
In collaboration with the Hong Kong Monetary Authority (HKMA), Project Aurum will progress into a new phase focusing on the privacy aspects of retail payments using CBDCs. This follows the HKMA’s 2022 completion of a wholesale interbank system, e-wallet, and a retail CBDC prototype.
The BIS is also working on four other projects — Project Leap, Project Symbiosis, Project Hertha, and Project NGFS Data Directory 2.0 — which do not directly intersect with the digital assets industry. Ongoing projects include Project Mandala for automating cross-border payment compliance, Project Pyxtrail for monitoring stablecoin balance sheets, and Project Cambridge, experimenting with a multi-CBDC platform for cross-border payments.
Throughout 2023, the BIS remained a prominent advocate for CBDCs and a critical voice against stablecoins. In November 2023, Agustín Carstens, the BIS’s general manager, called on central banks globally to spearhead digital innovation, highlighting CBDCs as a crucial element of this leadership.
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