Bank of International Settlements aims for new platform to test CBDCs

Months after Bank for International Settlements (BIS) posted a job announcement requiring a “host” of blockchain experts to join BIS Innovation Hub, the international financial institution’s Innovation Hub today stated its priorities and plans for 2021. It focuses on six key areas, among which the entity has included central bank digital currencies (CBDCs) among its newly launched projects. 

BIS is aiming at international collaboration among central banks “on innovative financial technology” to launch a new platform for testing digital currencies. According to a statement, it plans to introduce:  

A proof of concept platform using multiple wholesale CBDCs to explore the feasibility of faster and cheaper cross-border payments

Additionally, the initiative also includes a technological research project for “tiered retail CBDC distribution” and a distributed ledger technology (DLT) prototype for “distribution of tokenized green bonds to retail investors.”

Furthermore, head of the BIS Innovation Hub Benoit Coeure said in a statement: 

This work [program] shows our commitment to exploring in the most practical ways how best to harness technological change for the benefit of central banks and create public goods to support the global financial system.

According to the financial institute, the first three BIS Innovation Hub Centers in Hong Kong, Singapore and Switzerland, will drive the initiative. The Hub Centers will do so in conjunction with their respective central banks such as the Hong Kong Monetary Authority (HKMA), the Monetary Authority of Singapore and the Swiss National Bank.

Furthermore, after the new Hubs across Europe and North America begin their operations, the centers will take up other initiatives from BISIH, in the coming months. This will also include Strategic Partnership with the Federal Reserve Bank of New York, among the new centers planned for 2021.  

About 63 member central banks of the BIS can also share their research and discuss issues with regard to CBDCs, through the institute’s recently launched “Innovation Network,”.

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