• The Bank for International Settlements (BIS) will focus on experimenting with Central Bank Digital Currencies (CBDCs) this year and launch a new project to monitor stablecoins.
• BIS’s research and development arm, the Innovation Hub, will increase its focus on CBDCs in 2023 to improve payment systems.
• The BIS also completed a pilot platform called mBridge, which allowed multiple central banks to bridge their digital currencies.
BIS To Increase Focus On CBDC Experiments
The Bank for International Settlements (BIS) has announced that it will increase its focus on experimenting with Central Bank Digital Currencies (CBDCs) in 2023, in order to improve payment systems. The bank’s research and development arm, the Innovation Hub, will lead the effort by launching projects such as Project Pyxtrial, which is aimed at developing a platform to monitor the balance sheets of stablecoins. Additionally, the BIS plans to launch an experiment with the Bank of England dubbed Rosalind that will explore the distribution of retail CBDCs through an open API ecosystem.
Project Pyxtrial is a new experiment being launched by BIS’ London branch of the Innovation Hub that aims to enable systemic monitoring of stablecoins. Most central banks lack the tools necessary for such monitoring and asset-liability mismatches can occur without them. Through Pyxtrial, various technological tools are being investigated that may help supervisors and regulators build policy frameworks based on integrated data.
The Rosalind experiment is a joint effort between BIS’ Innovation Hub and the Bank of England that seeks to explore distribution of retail CBDCs through an open API ecosystem. This emphasis reflects interests and priorities of central banks as well as G20 countries’ program to improve cross-border payments.
mBridge Pilot Platform
In September 2020, BIS concluded a pilot for mBridge – short for Multiple CBDC Bridge – which allowed multiple central banks to bridge their digital currencies together via distributed ledger technology (DLT). This was seen as an important step towards interoperability between different CBDC networks operated by different countries or financial institutions.
With its increased focus on exploring CBDC solutions in 2023 – along with projects such as Project Pyxtrial and Rosalind – it appears clear that BIS is committed towards driving innovation within existing payments systems through technological advances such as DLT-based platforms like mBridge.