The Bank for International Settlements (BIS) Innovation Hub will proceed to the second phase of its central bank digital currency (CBDC) privacy testing and launch a blockchain-based tokenization project in 2024. 

On Jan. 23, the BIS announced its work program for the year. It features six new projects exploring the issues of cybersecurity, fighting financial crime, CBDCs and green finance. In the announcement, Cecilia Skingsley, head of the BIS Innovation Hub, stated that another critical area is tokenization, where the new project, Promissa, will be followed by “more initiatives.”

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Project Promissa, which is a  collaboration between the BIS, the Swiss National Bank and the World Bank, aims to build a proof-of-concept (PoC) of a platform for digital tokenized promissory notes. Promissory notes are the traditional debt or financial instrument legally projecting the obligation of one party to pay a determinate amount of money to another at a certain time. According to the BIS, most promissory notes, which play a prominent role in the financial system, are still paper-based. The BIS hopes to conclude the PoC by early 2025.

Meanwhile, Project Aurum, which is conducted jointly by the BIS and the Hong Kong Monetary Authority (HKMA), will enter a new phase of researching the privacy of retail payments using CBDCs. In 2022, the HKMA completed the wholesale interbank system , e-wallet and a retail CBDC prototype for the Aurum project.

Four other new projects from the BIS — Project Leap, Project Symbiosis, Project Hertha and Project NGFS Data Directory 2.0 — don’t crossover directly with the digital assets industry.

The bank will also continue its work on Project Mandala, which seeks to automatize the compliance procedures for cross-border payments; Project Pyxtrail, which monitors the balance sheets of asset-backed stablecoins; and Project Cambridge, which experiments with a multi-CBDC platform for cross-border payments.

The BIS remained one of the leading global advocates for CBDCs and a fiery critic of stablecoins in 2023. In November 2023, Agustín Carstens, general manager of the BIS, urged central banks worldwide  to lead digital innovation and called CBDCs the “central element” of this leadership.

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