The Bank of International Settlements (BIS) Advances CBDC Project
The Bank of International Settlements (BIS) has announced that its central bank digital currency (CBDC) project, known as Aurum, is entering a new phase this year. The project aims to explore the privacy of payments in retail CBDCs and will leverage expertise from academia and privacy regulators to enhance the design of CBDC systems. Cecilia Skingsley, head of the BIS Innovation Hub, emphasized the importance of understanding how new technologies impact central banks’ core work as the financial industry adopts them. Project Aurum is a joint collaboration between the BIS Innovation Hub Hong Kong Centre, the Hong Kong Monetary Authority, and the Hong Kong Applied Science and Technology Research Institute.
BIS Focuses on Tokenization
Beyond the CBDC project, BIS is also planning initiatives to test tokenization of financial instruments. Skingsley mentioned that tokenization is an important area for the BIS Innovation Hub, which has already launched one project and plans more initiatives. One such initiative is Project Promissa, aimed at building a proof-of-concept platform for digital “tokenized” promissory notes. The International Monetary Fund (IMF) will oversee the project developments as an observer.
Additional CBDC Projects
Alongside Aurum and tokenization efforts, BIS is working on Project mBridge, which involves creating a multi-CBDC common platform for wholesale cross-border payments. In September, BIS and central banks of France, Singapore, and Switzerland successfully tested cross-border settlement for wholesale-CBDCs through Project Mariana. This testing demonstrated seamless transfer of wCBDCs across different networks.
Hot Take: BIS’s Ongoing Commitment to CBDC Development
The Bank of International Settlements (BIS) continues to make significant strides in the development of central bank digital currencies (CBDCs). With the launch of Project Aurum, BIS aims to explore privacy in retail CBDCs and collaborate with experts to enhance CBDC system design. Additionally, BIS is actively exploring tokenization as an important area for innovation. The ongoing commitment to CBDC development by BIS reinforces its position as a leading authority in the global financial industry. As the world embraces digital currencies, BIS’s efforts will play a crucial role in shaping the future of central banking and financial transactions.
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