Tokenization and central bank digital currencies (CBDCs) will be among the priorities for the Bank for International Settlements’ (BIS) payments department over the next year.
This week, the Committee on Payments and Market Infrastructures (CPMI) announced the key themes of its 2024-25 work program, which range from boosting financial market risk management to enhancing cross-border payments.
Under its new work programme, the Committee on Payments and Market Infrastructures will keep promoting the safety and efficiency of payments and financial market infrastructures as technology and industry – and public policy needs – evolve https://t.co/8n7HCltG0Q pic.twitter.com/lOzlOe3i79
— Bank for International Settlements (@BIS_org) May 23, 2024
The committee revealed that CPMI will also focus on digital innovations in payments, clearing and settlement, monitoring, identifying and assessing the industry’s challenges, including tokenization and CBDCs.
The CPMI revealed that it’s working with other departments in the BIS to lay the foundation for a tokenized financial ecosystem. It intends to deliver a report at the next G20 meeting on the feasibility of a tokenized money and payments system.
“On CBDCs, the CPMI analyses the ideal timing of key technical and policy choices regarding cross-border CBDC functionality and how central banks can effectively collaborate on this functionality,” the committee revealed.
The BIS has been spearheading tokenization efforts globally. Last month, it announced that it was proceeding to the next phase of Project Agora, under which it’s working with central banks in the United States, the United Kingdom, Mexico, France and other major economies for tokenized money transfers.
Over the next year, the CPMI will also focus on stablecoins. It plans to partner with other global organizations on asset-linked stablecoin arrangements, including the International Organization of Securities Commissions (IOSCO).
Commenting on the committee’s work program, chair Fabio Panetta pledged to continue promoting the efficiency and safety of payments market infrastructure. The CPMI will continue to advance standard-setting work on risk management for all market players, added Panetta, who’s also the Governor of the Bank of Italy and a board member of the European Central Bank (ECB).
“[CPMI] will play a leading role in addressing obstacles to faster, cheaper, more transparent, and inclusive cross-border payments, as well as contributing to policy-oriented thought leadership in digital innovations in payments,” he stated.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
Watch: CBDCs are more than just digital money
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