The Bank for International Settlements (BIS) Innovation Hub has unveiled its plans for cutting-edge projects in 2024. After completing 12 projects in 2023 with eight more ongoing, the BIS has announced the first six projects to be undertaken this year.
The projects will cover various areas including cybersecurity, fighting financial crime, central bank digital currencies, and green finance. One of the projects, Project Leap, aims to quantum-proof payment systems against potential threats from quantum computers. Another project, codenamed Project Symbiosis, will utilize artificial intelligence and big data to improve emissions tracking in supply chains.
Project Aurum will focus on studying privacy issues in the design of central bank digital currencies, while Project NGFS Data Directory 2.0 aims to upgrade the data platform of the Network for Greening the Financial System to make climate-related financial data more easily searchable. Additionally, Project Promissa will test the use of distributed ledger technology to tokenize promissory notes and financial instruments used to fund international institutions. Project Hertha plans to apply network analytics to identify patterns of financial crime in real-time payment systems.
Cecilia Skingsley, the Head of the BIS Innovation Hub, expressed excitement for the upcoming projects and emphasized collaboration with central banks, international organizations, and other partners. Skingsley also highlighted the importance of tokenization and safety in improving the efficiency of services like payments without compromising security.
The BIS Innovation Hub has already carried out nearly 30 projects over the past four years in various emerging areas of technology relevant to central banking. However, the Hub emphasizes that the projects are experimental in nature, aiming to investigate the feasibility of different applications rather than endorse specific technologies.
It is worth mentioning that BIS has previously criticized cryptocurrencies, stating that they cannot be adopted as a monetary instrument due to inherent structural flaws. In line with increasing transparency, global banking regulators, including BIS, introduced a proposal to enforce standardized disclosure of crypto assets by major banks starting in January 2025.
Furthermore, BIS reported a surge in over-the-counter (OTC) derivatives volumes in November, driven by interest rate fluctuations and the phasing out of LIBOR benchmark rates.
In the realm of data accessibility, BIS launched a new Data Portal in November to enhance the availability and accessibility of international banking statistics and other financial indicators.
The bank’s active involvement in shaping policies and infrastructure for the evolving global financial system is evident, from its critique of cryptocurrencies to pushing transparency reforms and monitoring complex securities. Through these initiatives, BIS continues to promote stability and soundness in the financial industry.
