The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers. The announced projects include three projects for the upcoming Eurosystem Center, the first comprehensive explorations in cyber security, and the start of the second phase of the green finance project of the Hong Kong center.
The Eurosystem Center is expected to open in the coming months, with locations in Frankfurt and Paris and working together with all 19 euro area central banks and the European Central Bank. The Innovation Hub will also expand its portfolio in the areas of green finance and supervisory and regulatory technology (regtech and suptech). The first three Eurosystem Center projects involve:
- Developing a cryptocurrency market intelligence platform—The project's goal is to create an open-source market intelligence platform to shed light on market capitalizations, economic activity, and risks to financial stability. The project intends to provide comprehensive insights and improve transparency through data on asset backing, trading volumes, and market capitalization.
- Securing privacy of payments systems—This project will investigate and test potential cryptographic solutions that can withstand the vastly improved processing power of quantum computers. The goal is to test use cases in various payment systems and examine how the introduction of quantum-resistant cryptography will affect their performance.
- Enhancing transparency of climate-related disclosures—This project aims to build an open-source database of corporate reports coupled with a full-text search engine to identify sustainability-related disclosures. Machine learning and natural language processing tools will then be used to organize and structure this data.
In addition to the Eurosystem initiatives, the Hong Kong Center of the Innovation Hub will partner with the Bank of Israel and the Hong Kong Monetary Authority (HKMA) on Project Seala, which will explore technological solutions to allow intermediaries to provide central bank digital currencies (CBDCs) to users without the related financial exposure (reducing risks and costs in the process), combined with a strong focus on cyber-security. The Hong Kong Center will also start a new phase of its green finance Genesis project, wherein blockchain, smart contracts, and other related technologies will be used for the tracking, delivery, and transfer of digitized Mitigation Outcome Interests—de facto carbon credits recognized under national verification mechanisms compliant with the Paris Agreement—attached to a bond.
Related Link: Press Release
Keywords: International, Banking, Securities, Regtech, Suptech, CBDC, Cryptocurrencies, ESG, Climate Change Risk, Disclosures, Green Finance, Financial Stability, NLP, Green Bond, Blockchain, Smart Contracts, Project Genesis, Project Sela, HKMA, UNFCCC, BIS
Hasan leads Moody’s Analytics ESG methodology development. He is expert on carbon transition, nature related risks and is a guest lecturer at ESSEC Business school on sustainable finance.
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
Previous ArticleHMT to Reform Consumer Credit Act and Regulate Buy-Now Pay-Later
The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.
The European Banking Authority (EBA) recently published a report that recommends enhancements to the Pillar 1 framework, under the prudential rules, to capture environmental and social risks.
As a follow on from its prudential standard on the treatment of crypto-asset exposures, the Basel Committee on Banking Supervision (BCBS) proposed disclosure requirements for crypto-asset exposures of banks.
The Basel Committee on Banking Supervision (BCBS) and the European Banking Authority (EBA) have published results of the Basel III monitoring exercise.
The Prudential Regulation Authority (PRA) recently issued a few regulatory updates for banks, with the updated Basel implementation timelines being the key among them.
The U.S. Department of the Treasury has recently set out the principles for net-zero financing and investment.
The European Commission (EC) launched a stakeholder survey on the draft International Guiding Principles for organizations developing advanced artificial intelligence (AI) systems.
The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.
Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.
The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.