The BIS is trying to make international payments and transfers with stablecoins and CBDC. It will also implement blockchain to test the issuance of a tokenized green bond.
A new work program is the recent launch of The Bank for International Settlements (BIS). The work program includes research and a proof of concept on stablecoins and central bank digital currencies (CBDC).
The program receives support from a recently established innovation network made up of 63 specialists with central bank experience. By studying various aspects, including technological, regulatory, and financial, the entity will prove concepts regarding payments and transfer of funds at the international and inter-institutional level.
They will center their efforts on six topics: technology regulation, new financial market infrastructure, central bank digital currencies (CBDC), available finance, green finance, and cybersecurity.
BIS Innovation Hub is leading the research program. This innovation group, which works under the acronym BISIH, since 2019 has been interested in the process to “identify relevant trends in financial technologies and their values for central banks,” they explain in a report.
By carrying out proofs of concept, BISIH is looking forward to providing central banks with a set of more efficient solutions that could enhance their services in a cooperative framework between entities, institutions, academics, and financial service providers that focus more on the private sector. The initiative comes from the bank’s concern to enter the new monetary and economic dynamics regarding cryptocurrencies.
The research will occur among the Innovation Centers located in Hong Kong, Switzerland, and Singapore. The BIS hopes to open new places in the United States through an alliance with the Federal Reserve Bank of New York.
This entity set its operation in an iconic building in Manhattan, New York. They are expecting to activate more physical locations in Europe and will also have online meeting points throughout the year, they say. In total, experts from around the world will participate, with experience based on the 63 central banks.
The BIS is Aiming at Stablecoins and CBDC
Among the program’s projects is Helvetia, which will seek to test the operation of a CBDC for the Swiss National Bank (SNB). The BIS is also open to examining the feasibility of running a CBDC through a distributed platform that can link with outlets in the traditional financial system, the announcement said.
The entity states that it is only a proof of concept and not a statement of intent to issue a CBDC. Regulatory feasibility will receive a testing process without the results being legally effective by default.
Likewise, another proof of concept involves the development of a global market for CBDC transfers and exchanges. Central bank currencies would be transferable and interchangeable in a trading operation regarding issued coins by already regulated central banks. As specified, banks, financial entities, and participants, in general, would be able to buy, exchange, payor redeem these CBDCs in this test.
By: Jenson Nuñez.