Established in 1930, the BIS is owned by 63 central banks, representing countries from around the world that together account for about 95% of world GDP. Its head office is in Basel, Switzerland and it has two representative offices: in Hong Kong SAR and in Mexico City. The mandate of the BIS Innovation Hub is to identify and develop in-depth insights into critical trends in financial technology of relevance to central banks, to explore the development of public goods to enhance the functioning of the global financial system, and to serve as a focal point for a network of central bank experts on innovation. It complements the already well established cooperation within the BIS-hosted committees. BIS Innovation Hub announced:
- BISIH to focus on six themes: suptech and regtech; next-generation financial market infrastructures; central bank digital currencies; open finance; green finance; and cyber security.
- Projects to be spread across existing Hub Centres and new locations coming online in 2021.
- Priorities to be supported by the BIS Innovation Network, a network of experts drawn from the BIS’s 63 member central banks.
The Bank for International Settlements’ Innovation Hub (BISIH) today set out its work programme, demonstrating its focus on six key areas as it fosters international collaboration among central banks on innovative financial technology.
The thematic priorities are:
- Suptech and regtech
- Next-generation financial market infrastructures (FMIs)
- Central bank digital currencies (CBDCs)
- Open finance
- Cyber security
- Green finance
Among the newly launched projects will be:
- a proof of concept solution for a regulatory reporting platform employing data analytics and data visualisation to provide supervisors with deeper and more timely insights to address risks;
- a proof of concept platform using multiple wholesale CBDCs to explore the feasibility of faster and cheaper cross-border payments;
- a technological research project and associated prototype(s) for tiered retail CBDC distribution architectures; and
- a distributed ledger technology prototype for distribution of tokenised green bonds to retail investors.
“This work programme 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. We look forward to taking on the challenges of the year ahead together with our partner central banks.” says Benoît Cœuré, Head of BISIH
The initiatives will be driven by the first three BIS Innovation Hub Centres in Hong Kong, Singapore and Switzerland which have been established in conjunction with their partner central banks: the Hong Kong Monetary Authority, the Monetary Authority of Singapore and the Swiss National Bank. Other initiatives will be undertaken by the planned new Hub Centres across Europe and North America when they begin operations in the coming months, as well as a Strategic Partnership with the Federal Reserve Bank of New York.
During its first full year of operation, the BISIH advanced work on key projects related to its thematic priorities, including:
- The G20 TechSprint, which enabled central banks and financial regulators to collaborate with fintech firms on technology solutions to resolve operational problems in regulatory compliance and supervision.
- The Foundational Digital Infrastructure (FDI) project, which will develop a blueprint for a next-generation cross-border payments network that involves the interconnection of existing rails across jurisdictions.
- Project Helvetia, a collaborative experiment showing the feasibility of integrating tokenised assets and central bank money.
- The TechChallenge, which showcased the potential for new technologies to resolve problems in trade finance.
- Project Rio, a prototype market surveillance platform making use of artificial intelligence and other state-of-the-art technology.
On 19 January 2021, the BISIH also launched the BIS Innovation Network to support BISIH priorities, share knowledge about technology projects and discuss innovative answers to problem statements relevant to central banks. All 63 BIS member central banks were invited to the first meeting, which was introduced by a presentation from innovation expert Alexandre Janssen.
The BIS Innovation Network features six working groups, mirroring the BISIH’s thematic priorities. They are chaired by Susan Slocum (Reserve Bank of Australia, Suptech & Regtech), Siritida P Ayudhya (Bank of Thailand, Next Generation FMIs), Marius Jurgilas (Bank of Lithuania, CBDC), Aristides Andrade Cavalcante Neto (Central Bank of Brazil, Open Finance), Tomer Mizrahi (Bank of Israel, Cyber Security) and Sharon Donnery (Central Bank of Ireland, Green Finance).
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Image by Clickphoto Switzerland from Pixabay
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