The Singapore branch of the BIS Innovation Center is developing an international platform for testing Central Banks’ digital currencies.
The management of the Bank for International Settlements (BIS) said that one of its top priorities in 2021 is the study of government digital currencies. BIS intends to explore how these tools can speed up cross-border payments and reduce fees. BiS Innovation Center also plans to study a multi-tier architecture for distributing digital currencies between users.
BIS also plans to study the possibility of issuing tokenized “green bonds” for retail investors using a distributed ledger. Green Bonds are debt instruments issued to finance environmental projects.
All of these BIS initiatives will be driven by innovation hubs in Hong Kong, Singapore and Switzerland. The Singapore branch will create an international settlement platform on which regulated banks and payment firms will be able to conduct transactions using digital currencies from different central banks.
The Hong Kong subsidiary will work on tokenizing green bonds, develop solutions to facilitate foreign exchange transactions using government stablecoins, and explore various models for issuing stable cryptocurrencies. The Swiss Innovation Center BIS has already conducted two Proof-of-Concept (PoC) tests, in which the interaction of central bank cryptocurrencies with existing payment systems was studied.
“Our main challenge is to learn in practice how the latest technology can work for the benefit of central banks and society. Government digital currencies can improve the global financial system, ”said Benoît Cœuré, chairman of the BIS Innovation Center.
Six months ago, BIS announced that within a few years it would open new branches of the Innovation Center in Toronto, Stockholm and London, and a single branch would be created for Paris and Frankfurt. And in the fall, BIS offered to release tools to monitor compliance with regulatory requirements by stablecoin issuers.
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