BIS Innovation Hub unveils new projects in key growth areas

The Bank of International Settlements (BIS) Innovation Hub has announced new projects across its various centers spanning cybersecurity and green finance amongst others.

The projects will include the first three projects of its upcoming Eurosystem Centre, which is expected to open in the coming months with locations in Frankfurt and Paris. The Hub will also widen its portfolio in the areas of green finance, SupTech and RegTech.

The first key project centers around developing a cryptocurrency market intelligence platform. BIS claims the goal of the project is to create an open-source market intelligence platform to shed light on market capitalisations, economic activity and financial stability risks.

In addition, BIS will focus on securing the privacy of payments systems through post-quantum cryptography. According to BIS, this project will investigate and test potential cryptographic solutions that can withstand the vastly improved processing power of quantum computers. The goal is to test use cases in various payment systems and examine how the introduction of quantum-resistant cryptography will affect their performance.

BIS will also focus on increasing the transparency of climate-related disclosures. This particular project will aim to build an open-source database of corporate reports coupled with a full-text search engine to identify sustainability-related disclosures. Machine learning and natural language processing tools will then be used to organise and structure this data.

Alongside the Eurosystem initiatives, the Innovation Hub’s Hong Kong base with partner with the Bank of Israel and the Hong Kong Monetary Authority on a new study on CBDCs and cybersecurity.

BIS said, “Building on the Bank of Israel’s strengths in cyber security and on the HKMA learnings from the earlier Aurum project, Sela will explore technological solutions to allow intermediaries to provide CBDCs to users without the related financial exposure, reducing risks and costs in the process, combined with a strong focus on cyber security.”

Meanwhile, the Hong Kong Centre will also start the development of a new prototype for Phase 2 of Genesis – its green finance project – in collaboration with the United Nations Framework Convention on Climate Change as well as other public and private parties.

According to BIS, in this new phase, blockchain, smart contracts and other technologies will be used for the tracking, delivery and transfer of Mitigation Outcome Interests, which are de-facto carbon credits recognised under national verification mechanisms compliant with the Paris Agreement – attached to a bond.

A study by the Bank of International Settlements recently found nine out of ten central banks are exploring the use of central bank digital currencies (CBDCs).

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