Blockchain & Crypto

BIS to Focus on Cybersecurity, CBDCs and Green Finance in 2024

The Bank for International Settlements (BIS) announced its work program for the year, which includes six new projects exploring the issues of cybersecurity, fighting financial crime, CBDCs and green finance.

BIS to Focus on Cybersecurity, CBDCs and Green Finance in 2024

According to the 2024 program presented by the Bank for International Settlements (BIS) on Jan. 23, the first batch of six new projects planned this year focuses on safety and security, green finance, advanced data analytics and tokenisation, and next-generation financial infrastructures like central bank digital currencies (CBDCs).

“After completing 12 projects in 2023, we are looking forward to another busy year ahead, in collaboration with central banks, international organisations and other partners. Tokenisation is an important area where we have already launched one project and are planning more initiatives. Safety is another crucial area. We need to find ways to improve the efficiency of services like payments, without ever compromising on security, following the principle set by the G20 countries.”

Cecilia Skingsley, Head of the BIS Innovation Hub

The announced new projects are as follows.

Project Leap

The initiative of Eurosystem Centre, aiming to “quantum-proof” payment systems, will enter its second phase in 2024. After successfully establishing a quantum-safe communication channel between the central banks of France and Germany in the first phase, the project will explore how a payment system can be protected from the potential threat of quantum computers. The work is important since the power of quantum computing may soon reach the point where it’s able to break modern encryption systems that protect financial transactions today.

Project Symbiosis

In 2024, the Hong Kong Centre will test the use of artificial intelligence (AI) and big data for supply chain disclosure and adaptation. In particular, the project aims to improve the tracking of Scope 3 emissions, which are poorly defined and harder to track. The development of AI-supported methodologies for emissions disclosures will involve close cooperation with the private sector and civil society organisations.

Project Aurum

Another project of the Hong Kong Centre proceeds to a new phase to study the privacy of payments in retail CBDCs. It will leverage expertise from both academic studies and privacy regulators to boost central banks’ understanding of privacy in the design of CBDC systems.

In its first phase, Project Aurum worked on a full-stack solution that combines two types of tokens: intermediated CBDC and unique stablecoins backed by CBDC in the interbank system.

Project NGFS Data Directory 2.0

Headed by the Singapore Centre, the initiative will rebuild the data directory platform of the Network for Greening the Financial System. Its first version was built to systematically identify and map climate-related data gaps. Now, the upgraded platform will facilitate searching and browsing through data sources, making the directory more user-friendly and better suited for public use.

Project Promissa

The study, conducted jointly with the Swiss National Bank and the World Bank Group, with the International Monetary Fund as an observer, tests the feasibility of tokenising promissory notes. These are largely paper-based financial instruments used to fund multilateral development banks and other international financial institutions. Promissa will use distributed ledger technology to simplify promissory notes’ management and transparency.

Project Hertha

Launched by the London Centre, the project aims to test the use of network analytics in the identification of financial crime patterns in payment systems. It will map current and emerging financial crime types in real-time payment systems, learning from instant payment systems and digital asset networks.

Except for the main new projects, the bank will also continue its work on:

  • Project Mandala, focusing on automation of the compliance procedures for cross-border payments;
  • Project Pyxtrail, monitoring the balance sheets of asset-backed stablecoins;
  • and Project Cambridge, which experiments with a cross-border multi-CBDC platform.

Another similar initiative studying multilateral CBDC blockchain platforms to improve cross-border payments was launched in 2023 by the New York Federal Reserve and MAS.

Nina Bobro

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Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.