The BIS approach to global public-private collaboration

The BIS approach to global public-private collaboration¹

Ladies and gentlemen, let me start with a simple observation.

The financial system has never been more interconnected, more global or more dependent on technology.

That creates enormous opportunities – but also challenges for central banks.

The smooth functioning of payments and markets, as well as monetary and financial stability, increasingly depends on technologies and infrastructures developed and operated by the private sector. Much of the expertise needed to understand these developments also sits in the market.

So, the question is not whether central banks should engage with the private sector. They always have and always will. The real question is: how should we engage?

Consultation is our starting point. It allows us to listen, understand and learn.

Partnership goes a step further: it brings private and public actors together when hands-on collaboration is needed to develop and test practical solutions.

Let me explain how we approach this at the Bank for International Settlements, or BIS.

The BIS model: consultation is the norm

For almost a century, the BIS has facilitated cooperation among central banks, primarily through what is now known as the Basel Process. Central banks and supervisors come together to discuss common challenges, exchange views and build consensus around international standards.

The BIS has no legislative or regulatory authority of its own. Our role is to convene, provide research and technical expertise, and help foster shared understanding. Engagement with the private sector is an instrumental part of this work. 

Through consultations, workshops and roundtables, we draw on the experience of market practitioners. This helps us understand how markets work, assess the practical implications of proposed measures and identify perspectives we might otherwise miss.

This matters because the interests of individual institutions do not always align with those of the financial system as a whole. A bank naturally focuses on its own business. A central bank must also consider the stability and resilience of the wider system. Decisions that make sense for individual institutions do not necessarily produce the best outcome collectively. 

Consultation helps us understand these differences and develop better-informed policies, while preserving a clear line of responsibility: public authorities remain responsible for policy, while the private sector contributes expertise, investment and innovation. 

That is why consultation remains our starting point. But sometimes, listening and exchanging views are not enough.

When is consultation not enough?

Consider a problem spanning multiple jurisdictions, currencies, financial institutions and market infrastructures. Everyone may agree on the problem. They may even agree on the principles to fix it. But agreement on principles does not guarantee a workable solution.

Systems may not connect. Institutions’ requirements may conflict, and solutions that look convincing on paper can fail in execution. Sometimes, the only way forward is to build something and test it.

That is where partnership comes in. Partnership enables private sector participants and public authorities to expand the realm of possibilities, identify new options and find ways to make them a reality. Partnership does not replace consultation – it complements it. And it should be used selectively: when practical evidence, shared coordination or different technical capabilities are required to explore solutions in uncharted territory. 

The principle is straightforward: consult when you need to listen; partner when the solution requires hands-on collaboration to build and test. 

Let me illustrate this with two examples.

Example one: the Foreign Exchange Global Code 

The Foreign Exchange (FX) Global Code shows what well structured public-private collaboration can achieve. The Code emerged from a crisis of confidence following major market misconduct in the foreign exchange market. The revelations damaged trust in a market that depends on fair dealing and integrity.

Restoring trust in a global, decentralised and largely over-the-counter market with no single exchange or single rulebook required more than a set of new public principles. Market participants needed a shared, concrete understanding of what good conduct looks like – from handling orders and sharing information to managing conflicts of interest through disclosure. And new standards needed to be practical enough to be widely adopted.

So the public and private sectors co-created the solution. The BIS Markets Committee brought central banks together, while a private sector group provided perspectives across banks, asset managers, trading platforms, and corporates. Together, they developed the FX Global Code, published in May 2017.²

The Code is voluntary. Market participants demonstrate their commitment by signing a Statement of Commitment. Its power comes from market ownership.

Having chaired the Foreign Exchange Global Code Committee from 2021 to 2023, I saw this firsthand: 

• The public sector brought a system-wide perspective on effective functioning, fairness and market integrity.
• The private sector brought practical knowledge of market practices and behaviour.

Both were essential.

As the Code continues to evolve, one lesson is clear. When collective action is required, hands-on collaboration turns shared principles into a workable reality that market participants support and implement. 

Example two: cross-border payments and Project Agorá 

My second example addresses cross-border wholesale payments – a G20 strategic priority. Cross-border payments have been plagued for years by frictions, despite improvements in domestic payments and rapid advances in technology.

Can tokenisation fundamentally transform wholesale cross-border payments?

That is the core question behind Project Agorá, a public-private partnership convened by the BIS and the Institute of International Finance (IIF).³   The project brings together eight central banks and more than 40 financial institutions. It is the largest public-private collaboration undertaken by the BIS to date.

It explores whether a programmable, distributed ledger technology (DLT)-based platform – combining tokenised central bank reserves and tokenised commercial bank deposits – can streamline wholesale cross-border payments, while preserving the core two-tier monetary system. 

We cannot answer this question through surveys or consultations. Neither through research alone. We have to build and test through hands-on collaboration between private and public actors. 

Project Agorá has developed a functioning prototype and tested it using real-value transactions across participating institutions and currencies. Real-value testing exposes operational, technical, legal, and governance issues that simple simulations cannot reveal. 

The work builds on earlier BIS Innovation Hub projects, including Helvetia and Jura, which I sponsored while at the Swiss National Bank. These projects brought valuable insights for Project Agorá regarding the role of money in a tokenised ecosystem: 

• Central banks provide the trusted settlement asset in the form of reserves.
• Commercial banks provide private money in the form of deposits. 
• Both are needed to explore how the established correspondent banking model could operate in a tokenised environment.

Of course, experimentation does not predetermine a policy decision. Nor does it guarantee that a particular technology or platform will be adopted. Its purpose is to generate evidence, identify challenges and make the findings available to inform wider discussion and future policy decisions.

As noted by our General Manager at Jackson Hole, important milestones have been achieved. And more work lies ahead. 

This brings me to my second lesson: for central banks, the value of partnership is not in guaranteeing a specific outcome, but in giving policymakers grounded evidence to make informed decisions.

The role of the BIS Innovation Hub

This brings me to the BIS Innovation Hub, established in 2019.

Central banks face technologies they do not develop themselves – from distributed ledgers and artificial intelligence (AI) to cloud architectures and advanced cryptography. Understanding these technologies requires more than analysis and consultation. It requires hands-on experimentation. 

That is what the Innovation Hub enables. It provides a safe environment where central banks can work with financial institutions, tech companies, market infrastructures and academia to generate practical technological insights that help inform policy choices.

The Innovation Hub complements the Basel Process – by stepping in specifically when questions require practical prototyping. 

Innovation is not an end in itself. Nor does every new technology require partnership.

The goal of the BIS Innovation Hub is clear: generating practical tech insights that help central banks fulfil their mandates. 

Public purpose comes first

Deeper collaboration requires clear guardrails. We uphold four principles:

• Public purpose comes first. We solve public policy challenges, not a commercial interest or a technology in search of a use case.
• Second, clear governance. Public authorities retain policy responsibilities. Private partners contribute expertise and implementation capabilities without assuming public authority.
• Third, technological neutrality. We do not pick winners or grant commercial advantages. We help establish a shared understanding, leaving the private sector to develop different solutions.
• Fourth, public value. Experimentation must create public value. Partnership is justified by the public value it creates, not by the partnership itself.

Looking ahead

The challenges facing central banks will only grow more complex. Neither central banks nor private institutions will hold all the answers. We need to learn from each other. 

The BIS has a distinct role to play: convening relevant stakeholders across the globe to exchange views, learn and deliver evidence – always anchored in public accountability.

Consultation is our starting point. It allows us to listen, understand and learn. Partnership goes a step further: it brings public and private actors together to develop and test when practical solutions require hands-on collaboration.

Partnership is not the ultimate destination; better outcomes for the public interest are. That is what we, collectively, must strive to achieve – at the BIS, in the central banking community and with the private financial sector.

Thank you.