BIS to focus on tokenization, CBDC as part of 2024 strategy

The Bank for International Settlements (BIS) has revealed its strategic priorities for 2024, with a particular emphasis on Central Bank Digital Currencies (CBDCs) and tokenization.

The 2024 roadmap points to a continuation of the watchdog’s engagement with digital financial technologies. The BIS has taken a heavily pro-CBDC stance and has published a comprehensive framework for countries looking to create their own localized digital currencies.

Exploring tokenization

One of the most ambitious undertakings in the BIS’s 2024 agenda is Project Promissa, which aims to revolutionize financial instruments by digitizing promissory notes using blockchain technology.

Promissory notes are still paper-based despite their integral role in the financial system. According to the regulator, their digitization could greatly enhance efficiency and transparency in financial transactions.

Project Promissa is a collaborative venture between BIS, the Swiss National Bank, and the World Bank. The proof-of-concept phase for the project is scheduled for completion by early 2025.

Project Aurum

Complementing the tokenization efforts is Project Aurum, a joint initiative with the Hong Kong Monetary Authority (HKMA), which completed its initial pilot testing phase in 2022.

Project Aurum will focus on privacy in retail payments using CBDCs. Following its initial phase in 2022, the project aims to delve deeper into privacy issues related to CBDCs.

Project Aurum’s exploration of CBDC privacy is crucial, considering the growing global interest in digital currencies and the need for secure, private transactions. The project aligns with the broader strategy of the watchdog, highlighting the increasing importance of CBDCs in reshaping the financial sector.

The BIS’s 2024 agenda includes four other projects: Project Leap, Project Symbiosis, Project Hertha, and Project NGFS Data Directory 2.0. These projects cover cybersecurity, green finance, and financial crime. This diversified approach indicates BIS’s broad engagement with various aspects of financial technology.

Historically, BIS has maintained a prudent approach towards digital currencies, with a particular focus on the implications of stablecoins. In late 2023, Agustín Carstens, general manager of BIS, highlighted the importance of central banks in digital currency innovation, with a focus on CBDCs.

Source: https://cryptoslate.com/bis-to-focus-on-tokenization-cbdc-as-part-of-2024-strategy/