The Bank for International Settlements (BIS) Innovation Hub has recently released a roadmap of work with central banks. The roadmap includes central bank digital currency (CBDC) projects and a distributed ledger technology-based retail green bonds solution. BIS specifically outlined five projects – two are new initiatives, and three are for wholesale CBDCs or bank-to-bank usage.
Retail CBDC Outline
The retail CBDC project will be based out of Hong Kong and will specifically focus on the tiered distribution of a retail CBDC via banks and payment service providers. One should note that the Hong Kong Monetary Authority is currently actively working on using the digital yuan for international payments.
Wholesale CBDC Outline
The first wholesale CBDC is the ongoing Project Helvetia experiments with the Swiss National Bank. The bank conducted a trial to connect the SIX Digital Exchange with a wholesale CBDC to enable instant settlement for blockchain transactions.
The second project is a platform to settle cross-border payments using multiple wholesale CBDCs. This project is based out of Singapore and can be used by banks and payment service providers for settlement purposes.
It should be noted that there is already a “multi-currency payment network” in the works in Singapore that’s overseen by the Monetary Authority of Singapore, JP Morgan, DBS Bank, and state-owned investment firm Temasek. This project is a blockchain-based clearing and settlement network for wholesale payments that will initially focus on domestic multi-currency payments.
The third wholesale CBDC project is a Multiple CBDC bridge for cross-border transfers and real-time atomic settlement of foreign exchange transactions. This project is an ongoing initiative based out of Hong Kong. It builds on an ongoing project between the Bank of Thailand and the Hong Kong Monetary Authority called Project Inthanon-LionRock. CryptoBLK was previously partnering with the Thai side of this project using R3’s Corda. However, for the latest iteration, ConsenSys will be working with both sides using Ethereum.
What is the BIS Innovation Network?
The BIS Innovation Network has six working groups 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).
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.