As the financial industry adopts new technologies, we need to understand how they affect central banks' core work. Central banks are actively examining the potential for novel technologies to help deliver on their mandates. After completing 12 projects in 2023, we are looking forward to another busy year ahead, in collaboration with central banks, international organisations and other partners.

Tokenisation is an important area where we have already launched one project and are planning more initiatives. Safety is another crucial area. We need to find ways to improve the efficiency of services like payments, without ever compromising on security, following the principle set by the G20 countries.
Cecilia Skingsley, Head of the BIS Innovation Hub

New projects

Project Leap, from the Eurosystem Centre, starts its phase II, aiming to "quantum-proof" payment systems, after successfully establishing a quantum-safe communication channel between the central banks of France and Germany in its first phase. Now, the project will show how a payment system can be protected from the potential threat of quantum computers, which may be able to break the encryption systems used nowadays to protect financial transactions.

Project Symbiosis, from the Hong Kong Centre, will test the use of artificial intelligence (AI) and big data technologies for supply chain disclosure and adaptation. The project will seek to improve the tracking of so-called Scope 3 emissions, which are less well defined and harder to track. It will do this by working with the private sector and civil society organisations in creating AI-supported methodologies for emissions disclosures by small and medium-sized companies.

Also from the Hong Kong Centre, Project Aurum enters a new phase in which it will study the privacy of payments in retail CBDCs. The goal is to leverage expertise from academia and privacy regulators to advance central banks' understanding of privacy in the design of CBDC systems.

Led by the Singapore Centre, Project NGFS Data Directory 2.0 will rebuild the data directory platform of the Network for Greening the Financial System. While the directory's first version was built to systematically identify and map climate-related data gaps, the revised version will aim to facilitate searching and browsing through data sources, making the directory more usable as a public resource.

The recently started Project Promissa tests the feasibility of tokenising promissory notes, financial instruments that help fund multilateral development banks and other international financial institutions. In many cases, these are still paper-based. The project will use distributed ledger technology to simplify their management and transparency. It is conducted jointly with the Swiss National Bank and the World Bank Group, with the International Monetary Fund as observer.

Project Hertha, launched by the London Centre, aims to test the use of network analytics to help identify financial crime patterns in payment systems. It will map current and emerging financial crime typologies in real-time payment systems, drawing upon lessons from instant payment systems and digital asset networks.

In just over four years, the Innovation Hub has carried out almost 30 projects in various areas and has gone from a handful of people to a 90-strong staff. I am very proud of the work we have done. However, technology will not slow down for anyone, and digitalisation affects everyone. It is our job to make sure technology serves economically meaningful activities.
Cecilia Skingsley

All these new initiatives will be added to existing projects that various Innovation Hub Centres will continue to develop this year: FuSSE, Gaia, Mandala, mBridge phase III, Nexus phase III, Pyxtrial, Rio and Viridis.

During 2023, the Innovation Hub concluded projects Atlas, Aurora, Dynamo, Icebreaker, Leap Phase I, Mariana, Meridian, Nexus Phase II, Polaris, Rosalind Phases I and II, Sela and Tourbillon.