Bracing for the future of central banking

The BIS Innovation Hub (BISIH) is leading practical experiments to show how central bank digital currencies (CBDCs) could help deliver faster, cheaper and more transparent cross-border payments. These experiments demonstrate that common systems encompassing multiple CBDCs are operationally feasible and could bring efficiencies. Yet policy, legal, governance and economic questions remain. The BISIH is uniquely positioned to bring central banks together in the collaborative efforts that will be necessary to make further progress on this question.

Project Icebreaker sets out to explore a specific way to interlink domestic systems (a so-called hub-and-spoke solution).

Project Mariana explores automated market-makers (AMM) for the cross-border exchange of hypothetical Swiss franc, euro and Singapore dollar wholesale CBDCs. It will seek to examine the potential for financial institutions to settle foreign exchange trades in financial markets. Mariana is a joint project of the BIS Innovation Hub, the Banque de France (within the Eurosystem), the Monetary Authority of Singapore and the Swiss National Bank.

Project Meridian investigates how recent rapid advances in financial technology could deliver innovations in the real-time gross settlement (RTGS) systems operated by central banks and which sit at the core of modern electronic payment systems.

Over several workstreams, Project Polaris will provide central banks with the essential information needed to inform decision-making, architecture, design, implementation planning and investments. It will also address long-term change and operational considerations.

Rio is a prototype of a central bank-specific, real-time capable market monitoring platform. The cloud-based stream processing platform will process real-time financial data feeds and compute relevant liquidity and market risk measures.

Developing a retail central bank digital currency (CBDC) system is a significant undertaking and there are many areas that central banks need to explore including: How to improve public-private sector collaboration? How to maximize interoperability, encourage competition and enable adoption? How might retail CBDC meet current and future consumer needs in a fast-changing payments landscape? Project Rosalind aims to help answer some of these questions.

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.

Project Tourbillon is a project launched by the BIS Innovation Hub's Swiss Centre which explores how to improve cyber resiliency, scalability and privacy in a prototype Central Bank Digital Currency (CBDC).