Key takeaways:
- The BIS Innovation Hub will introduce a blockchain-based tokenization project and move forward with the second phase of its CBDC privacy testing.
- Head of the BIS Innovation Hub said that tokenization is another important topic and that Promissa is the first of “more initiatives” in this field.
In 2024, the Bank for International Settlements (BIS) Innovation Hub will introduce a blockchain-based tokenization project and move forward with the second phase of its central bank digital currency (CBDC) privacy testing.
The BIS released its annual work program on January 23. It includes six brand-new initiatives that investigate topics including green finance, countering financial crime, cybersecurity, and CBDCs.
Head of the BIS Innovation Hub, Cecilia Skingsley, said in the announcement that tokenization is another important topic and that Promissa is the first of “more initiatives” in this field.
The BIS, the Swiss National Bank, and the World Bank are working together on Project Promissa, which intends to develop a proof-of-concept (PoC) for a digital tokenized promissory note platform.
The classic debt or financial instrument that legally projects a party’s commitment to pay another party a specific sum of money at a specific time is a promissory note. The majority of promissory notes, which are very important to the financial system, are still paper-based, according to the BIS. By early 2025, the BIS intends to have the PoC completed.
Meanwhile, a new phase of study on the privacy of retail payments utilizing CBDCs will begin for Project Aurum, which is being carried out by the BIS and the Hong Kong Monetary Authority (HKMA). For the Aurum project, the HKMA finished the retail CBDC prototype, the e-wallet, and the wholesale interbank system in 2022.
Project Leap, Project Symbiosis, Project Hertha, and Project NGFS Data Directory 2.0 are the other four new BIS initiatives that don’t directly relate to the digital assets sector.
The bank will also keep working on three projects: Project Pyxtrail, which keeps an eye on asset-backed stablecoin balance sheets; Project Cambridge, which tests a multi-CBDC platform for cross-border payments; and Project Mandala, which aims to automate the compliance procedures for cross-border payments.
