Exploring Digital Frontiers in Finance
The Bank for International Settlements (BIS) has unveiled an ambitious agenda for 2024, focusing on advancing central bank digital currencies (CBDCs), blockchain-based tokenization, cybersecurity, and green finance. This move underscores BIS's commitment to spearheading innovation in the global financial landscape.
Project Promissa: Pioneering Tokenized Promissory Notes
A highlight of the BIS's 2024 program is Project Promissa, a collaborative effort involving the BIS, the Swiss National Bank, and the World Bank. This project aims to develop a proof-of-concept for a platform dedicated to digital tokenized promissory notes. Traditional promissory notes, crucial in the financial system, remain largely paper-based, and Project Promissa seeks to modernize this key financial instrument. The project's completion is targeted for early 2025.
Advancing Privacy in CBDC Transactions
The BIS will also progress to the next phase of Project Aurum, in partnership with the Hong Kong Monetary Authority (HKMA). This phase focuses on enhancing the privacy of retail payments using CBDCs. Building on the HKMA's accomplishments in developing a wholesale interbank system and a retail CBDC prototype in 2022, this project continues to explore the potential and challenges of digital currencies in mainstream finance.
Additional Projects and Continued Innovation
The BIS's 2024 roadmap includes four other new initiatives — Project Leap, Project Symbiosis, Project Hertha, and Project NGFS Data Directory 2.0 — which, while not directly related to digital assets, contribute to the broader scope of financial innovation. Ongoing projects like Project Mandala, Pyxtrail, and Cambridge, focusing on areas such as automated compliance, stablecoin monitoring, and cross-border CBDC payments, will also continue.
BIS's Stance on CBDCs and Stablecoins
Throughout 2023, the BIS emerged as a vocal proponent of CBDCs and a critic of stablecoins. In a notable statement in November 2023, Agustín Carstens, General Manager of the BIS, emphasized the need for central banks to lead digital innovation, positioning CBDCs as a pivotal element in this new era of financial technology.