The Bank for International Settlements (BIS) Innovation Hub intends to launch a blockchain-based tokenization project and further develop its central bank digital cy (CBDC) privacy testing program.
On January 26, the BIS announced six new projects as part of its 2024 Innovation Hub work program. These included projects involving cyber security, fighting financial crime, central bank digital currencies (CBDCs) and green finance.
One of the BIS’s new initiatives is called Project Promissa, which represents a collaboration involving the BIS, the Swiss National Bank, and the World Bank. Its objective is to develop a proof-of-concept for a platform designed to facilitate digital tokenized promissory notes. “The project will use distributed ledger technology to simplify their management and transparency,” the BIS announcement said.
“Tokenization is an important area where we have already launched one project and are planning more initiatives,” BIS Innovation Hub Head Cecilia Skingsley added. A promissory note is a financial instrument that outlines the commitment of one party to repay a specific amount of money to another at a predetermined time, representing a form of debt.
According to the BIS, most promissory notes, which play a prominent role in the financial system, are still paper-based, and the institution plans to conclude the proof-of-concept by early 2025.