The Bank for International Settlements (BIS) Innovation Hub's Eurosystem Centre will work on three initial projects upon launch 'in the coming months'.

The Centre is expected to be launched across locations in Frankfurt, Germany, and Paris, France.

These projects are centered on cryptocurrency market intelligence, securing the privacy of payments security, and bridging data gaps related to climate change discourses.

The assigned undertakings of the Eurosystem Centre are part of the new set of projects the BIS Innovation Hub announced on Friday across its various centres.

They are part of updates to the Hub’s 2022 work programme.

The BIS has innovation hubs in Switzerland, Hong Kong, Singapore, Sweden and other parts of the globe.

BIS in January had said it would launch new projects into central bank digital currencies (CBDCs), next generation payments systems and decentralized finance (DeFi) this year.

Additionally, the bank announced the appointment of Raphael Auer as the Head of the BIS Innovation Hub Eurosystem Centre.

Moreover, it said its work programme would see new projects on green finance, regulatory and supervisory technology as well as cyber security.

This included the first projects for the London and Stockholm Centers.

‘First Three Projects’

BIS Innovation Hub in a press statement released on Friday explained that the goal of the first project is to create an open-source cryptocurrency intelligence platform that will provide more transparency on market capitalization, economic activity and risks to financial stability.

It explained that the collapse of many stablecoins and DeFi lending platforms have exposed the difficulty in assessing their risks and economic potential.

“One reason is that most data on asset backing, trading volumes and market capitalization is self-reported by unregulated firms. Individual datasets and commercially available solutions do not provide comprehensive insights and lack transparency,” the Hub explained.

On the other hand, BIS said the second project has been designed to investigate and test potential cryptographic solutions that can withstand the vastly improved processing power of quantum computers.

The goal, according to the Hub, is to test use cases in various payment systems and examine how the introduction of quantum-resistant cryptography will affect their performance.

BIS explained, “Quantum computers may be capable of breaking the cryptography used by central banks and the private financial sector to secure payment and settlement systems.

“This threatens confidentiality and could undermine the integrity of payments systems.

“Given the long-term sensitivity of financial data, this vulnerability must be addressed well in advance of the advent of quantum computing.”

Additionally, the Hub noted that the third project will help to close important data gaps and inconsistencies in data collection for climate sustainability.

This will help ease the duty of central banks who are increasingly looking into how climate change may affect financial stability, inflation and other issues within their mandate, the Hub noted.

“This project aims to build an open-source database of corporate reports coupled with a full-text search engine to identify sustainability-related disclosures,” it said.

“Machine learning and natural language processing tools will then be used to organize and structure this data,” it added.

Meanwhile, the BIS Innovation Hub said its Hong Kong Centre will partner with the Bank of Israel and the Hong Kong Monetary Authority (HKMA) on a new study on CBDCs and cybersecurity.

“Building on the Bank of Israel's strengths in cyber security and on the HKMA learnings from the earlier Aurum 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,” it explained.

The Bank for International Settlements (BIS) Innovation Hub's Eurosystem Centre will work on three initial projects upon launch 'in the coming months'.

The Centre is expected to be launched across locations in Frankfurt, Germany, and Paris, France.

These projects are centered on cryptocurrency market intelligence, securing the privacy of payments security, and bridging data gaps related to climate change discourses.

The assigned undertakings of the Eurosystem Centre are part of the new set of projects the BIS Innovation Hub announced on Friday across its various centres.

They are part of updates to the Hub’s 2022 work programme.

The BIS has innovation hubs in Switzerland, Hong Kong, Singapore, Sweden and other parts of the globe.

BIS in January had said it would launch new projects into central bank digital currencies (CBDCs), next generation payments systems and decentralized finance (DeFi) this year.

Additionally, the bank announced the appointment of Raphael Auer as the Head of the BIS Innovation Hub Eurosystem Centre.

Moreover, it said its work programme would see new projects on green finance, regulatory and supervisory technology as well as cyber security.

This included the first projects for the London and Stockholm Centers.

‘First Three Projects’

BIS Innovation Hub in a press statement released on Friday explained that the goal of the first project is to create an open-source cryptocurrency intelligence platform that will provide more transparency on market capitalization, economic activity and risks to financial stability.

It explained that the collapse of many stablecoins and DeFi lending platforms have exposed the difficulty in assessing their risks and economic potential.

“One reason is that most data on asset backing, trading volumes and market capitalization is self-reported by unregulated firms. Individual datasets and commercially available solutions do not provide comprehensive insights and lack transparency,” the Hub explained.

On the other hand, BIS said the second project has been designed to investigate and test potential cryptographic solutions that can withstand the vastly improved processing power of quantum computers.

The goal, according to the Hub, is to test use cases in various payment systems and examine how the introduction of quantum-resistant cryptography will affect their performance.

BIS explained, “Quantum computers may be capable of breaking the cryptography used by central banks and the private financial sector to secure payment and settlement systems.

“This threatens confidentiality and could undermine the integrity of payments systems.

“Given the long-term sensitivity of financial data, this vulnerability must be addressed well in advance of the advent of quantum computing.”

Additionally, the Hub noted that the third project will help to close important data gaps and inconsistencies in data collection for climate sustainability.

This will help ease the duty of central banks who are increasingly looking into how climate change may affect financial stability, inflation and other issues within their mandate, the Hub noted.

“This project aims to build an open-source database of corporate reports coupled with a full-text search engine to identify sustainability-related disclosures,” it said.

“Machine learning and natural language processing tools will then be used to organize and structure this data,” it added.

Meanwhile, the BIS Innovation Hub said its Hong Kong Centre will partner with the Bank of Israel and the Hong Kong Monetary Authority (HKMA) on a new study on CBDCs and cybersecurity.

“Building on the Bank of Israel's strengths in cyber security and on the HKMA learnings from the earlier Aurum 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,” it explained.