Bank for International Settlements to Launch a Market Intelligence Platform for Crypto Assets

Bank for International Settlements to Launch a Market Intelligence Platform for Crypto Assets – Bank for International Settlements to Launch a Market Intelligence Platform for Crypto Assets – As one of the projects it is undertaking in its innovation hub, the bank of international settlements (BIS) is launching a market intelligence platform to protect against risks to digital assets.

With the purpose of “fostering international monetary and financial cooperation, as well as serving as a bank for central banks,” the Bank for International Settlements is a global financial institution that is owned by central banks.

When it comes to CBDCs, BIS has been at the forefront of encouraging Central Bank cooperation, including Project Dunbar, which includes the South African Reserve Bank (SARB).

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Quantum computing, a rapidly developing technology that uses the laws of quantum physics to tackle problems that are too complicated for classical computers, is one of the major threats noted by the bank.

The cryptography utilized by central banks and the commercial financial industry to protect payment and settlement systems may be broken by quantum computers, according to BIS. The integrity of payment systems may be undermined, endangering confidentiality.

Given the sensitivity of financial data over the long term, this vulnerability needs to be fixed well before the development of quantum computing. This project will look into and test possible cryptographic solutions against quantum computers’ significantly increased processing power.

Testing use cases in different payment systems is intended to determine how the implementation of quantum-resistant cryptography will impact those systems’ performance.

The bank also noted that it is challenging to assess the dangers and economic possibilities of decentralized finance (DeFi) lending services, which have collapsed in large numbers due to stablecoins. One reason is that unregulated firms typically self-report statistics on asset backing, trade volumes, and market capitalization.

BIS noted in a statement:

“Individual datasets and commercially accessible solutions lack transparency and do not offer thorough insights. To provide information on market capitalizations, economic activity, and threats to financial stability, the project aims to develop an open-source market intelligence platform.”

Additionally, the bank is working to improve CBDC security:

“The traditional model, known as the “two-tier architecture,” in which money is distributed to the public via intermediaries like banks and payment service providers, is what most central banks studying retail CBDCs want to imitate.”

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Sela will explore technological solutions to enable intermediaries to provide CBDCs to users without the associated financial exposure, reducing risks and costs in the process, combined with a strong focus on cyber security, building on the strengths of the Bank of Israel in cyber security and on the HKMA learnings from the earlier Aurum project.

The tracking, delivery, and transfer of so-called digitized Mitigation Outcome Interests, which are de facto carbon credits acknowledged under national verification mechanisms compliant with the Paris Agreement and attached to a bond, are also being explored by BIS using blockchain, smart contracts, and other related technologies.