The Bank for International Settlements (BIS) immediately followed the IMF in proposing its version of a new type of infrastructure concept for the financial market, also involving central bank digital currencies (CBDC) and tokenized assets.
The BIS published its own vision of a new type of financial infrastructure for transactions with different types of assets, including tokenized assets and CBDCs. The technology is based on a “single ledger,” and the interaction of different participants of the system is supposed to be carried out by means of application programming interfaces (APIs).
The document’s authors also criticized existing financial technologies, noting “the collapse of crypto and the faltering progress of other tokenization projects.” The BIS experts call the existing tokenization projects’ fragmentation one of the key weaknesses.
The concept proposed by the BIS envisages a single ledger, which would include all the ledgers of counterparties, information exchange, and the ability to program terms for executing transactions. The system will enable fast transaction processing and atomic calculations performed in a “partitioned data environment.”
The hypothetical system should also support cross-border transactions while eliminating the need for intermediaries. The concept implies the indirect participation of central banks and private payment service providers in the system.
Notably, the document never mentions blockchain. The BIS first presented the blockchain-like technology of a single ledger at the FinTech festival in Singapore in February 2023.
A similar concept, which is based on a single ledger and mentions blockchain only in passing, was also presented by the IMF the day before. Apparently, this event forced the BIS to rush with the publication of its own concept of an innovative payment system, as it’s set out in one of the chapters of the organization’s annual report, the full version of which will be published on June 25.
The BIS experiments with DLT technologies other than blockchain have already borne fruit with the recently completed Project Rosalind, where the main interaction between counterparties was also done using APIs.
