The Bank for International Settlements (BIS) Innovation Hub is gearing up for the next phase of central bank digital currency (CBDC) privacy testing and is set to launch a groundbreaking blockchain-based tokenization project in 2024.
In its recently unveiled work program for the year, the BIS outlined six innovative projects addressing crucial topics such as cybersecurity, combating financial crime, CBDCs, and green finance. Cecilia Skingsley, head of the BIS Innovation Hub, highlighted the significance of tokenization, emphasizing that the new project, named Promissa, is just the beginning, with more initiatives in the pipeline.
Promissa: Pioneering Tokenization
Collaborating with the Swiss National Bank and the World Bank, Project Promissa aims to develop a proof-of-concept (PoC) for a platform dedicated to digital tokenized promissory notes. These notes, integral to the financial system, are predominantly paper-based. The BIS hopes to complete the PoC for Promissa by early 2025.
Project Aurum, a joint effort between the settlement hub and the Hong Kong Monetary Authority (HKMA), is advancing its research on the privacy aspects of retail payments using CBDCs. Building on the achievements of 2022, including the development of a retail CBDC prototype, Aurum enters a new phase to delve deeper into privacy considerations.
Diverse BIS Ventures
Apart from digital assets, the BIS is engaging in various projects like Project Leap, Project Symbiosis, Project Hertha, and Project NGFS Data Directory 2.0, addressing diverse financial industry aspects.
The hub its commitment to CBDCs and remains vocal about its stance on stablecoins. In a notable development in November 2023, Agustín Carstens, the hub’s general manager, urged central banks worldwide to spearhead digital innovation, positioning CBDCs as the central element of this leadership vision.