In a groundbreaking move, the Bank for International Settlements (BIS) Innovation Hub has unveiled a series of ambitious projects as part of its 2024 work program, signaling a significant stride towards embracing blockchain technology and advancing central bank digital currencies (CBDCs).
Tokenization Advancements with Project Promissa
At the forefront of BIS’s initiatives is Project Promissa, a collaborative effort involving the BIS, the Swiss National Bank, and the World Bank. This project aims to revolutionize the financial landscape by developing a proof-of-concept platform for digital tokenized promissory notes.
Cecilia Skingsley, Head of BIS Innovation Hub, emphasized the importance of tokenization, stating, “Tokenization is an important area where we have already launched one project and are planning more initiatives.” Project Promissa will leverage distributed ledger technology to simplify the management and transparency of promissory notes, currently largely paper-based. The BIS plans to conclude the proof-of-concept by early 2025.
Privacy in Retail CBDCs Explored with Project Aurum
In another significant move, the BIS Innovation Hub’s Hong Kong Centre is set to continue its exploration of privacy in retail CBDCs through Project Aurum. This initiative, conducted jointly with the Hong Kong Monetary Authority (HKMA), focuses on advancing the understanding of privacy in the design of CBDC systems.
“Aurum is a full-stack CBDC system comprising a wholesale interbank system and a retail e-wallet system,” stated the BIS Innovation Hub. The project aims to research and develop two distinct types of tokens within the interbank system: an intermediated CBDC and a stablecoin backed by CBDCs.
With an overarching goal to enhance cybersecurity, combat financial crime, and promote green finance, these projects mark a pivotal moment in the BIS’s commitment to fostering innovation within the global financial landscape. The BIS continues to play a leading role in shaping the future of banking and digital currencies, setting the stage for a transformative era in the financial sector.
