A More Detailed CBDC Monitoring System Will be Launched by BIS

The Bank for International Settlements (BIS) will launch a stablecoin monitoring project and will place a greater emphasis on CBDC experiments. According to the most recent announcement, the institution is expanding its CBDC research.

Development and Research

BIS’s latest announcement focuses on the institution’s innovation hub. The hub has numerous plans to expand its development and research programs. According to the post, the BIS Innovation Hub develops public goods in the technology space to assist central banks and improve the functioning of the financial system. 

The BIS Innovation Hub will put more emphasis in 2023 on enhancing payment systems, experimenting with digital currencies issued by central banks, influencing the direction of financial legislation and supervision, and protecting and greening the financial industry.

Project Pyxtrial, a fresh experiment being started by the Hub’s London Center to allow the systemic monitoring of stablecoins, is also a part of this year’s work schedule.

According to BIS, 15 of the 26 initiatives that were active during the past couple of years were related to CBDCs and payments system upgrades. This emphasis reflects the objectives and concerns of central banks as well as the G20 initiative to enhance cross-border payments.

Projects attempting to influence the direction of legislation, oversight, and funding are another area of attention. For instance, the creation of instruments for real-time market monitoring, the use of cryptocurrencies and decentralized finance, and other regulatory objectives.

While specific use cases for the supervision of finance for small and medium-sized firms are being investigated, technological innovation in corporate digital identification has been examined.

The most crucial strategy originates from the Pyxtrial project. A platform to track the balance sheets of stablecoins is being developed as part of a new initiative at the London Centre.

To systemically monitor stablecoins and prevent asset-liability mismatches, most central banks lack the necessary instruments. The project will look into various technology solutions that could assist regulators and supervisors in creating frameworks for policy based on integrated data.

The BIS Innovation Hub will continue to advance the BIS Innovation Network and other important projects in addition to its project portfolio. Senior executives from the public and private sectors as well as academics will come together at the third BIS Innovation Summit, “Technological innovation in the age of uncertainty,” which will be placed in Basel, Switzerland, on March 21 and 22 of 2023.

The new plans by BIS show more traditional financial institutions are focusing on the adoption of cryptocurrency products and improving them. It shows the global market has accepted technology and even wants to improve it in terms of adoption. Monitoring shows some worrying signs about stricter regulations, though.