The general director of the BPI, Agustín Carstens, and the president of the IDB, Ilan Goldfajn, were responsible for signing this agreement last Thursday to strengthen regional cooperation and integration to develop innovative technologies for the financial sector.

The text was signed during the High Level Dialogue on the Development of Critical Infrastructures for Financial Markets held in Santiago de Compostela, Spain, in the presence of Finance Ministers and Governors of central banks in the region.

The first collaboration between both institutions will focus on the FuSSE Project (Fully Scalable Settlement Engine in English). This initiative seeks to design and test ‘backend’ functionalities that can adapt to multiple types of infrastructures, allowing them to process a continually growing number of transactions.

Its goal is to test highly scalable systems in three dimensions: the number of transactions, the types of assets and the number of participants. The technology could support payment systems, securities settlement systems or even central bank digital currencies.

Flexible modular architecture

In its first phase, the project will create a proof of concept of a basic settlement mechanism that will be developed as a flexible modular architecture incorporating quantum-resistant cryptography.

Modularity will allow implementing countries to adopt the full set or any subset of modules for their specific purposes. All software developed will be published and made available to the global central banking community in open source, fulfilling the BIS Innovation Center’s mission to develop public goods.

This joint project will benefit from the comparative advantages of each institution, as well as the central banks in the region that will be invited to join later. The BIS’s experience in technical experimentation and its global reach are complemented by the IDB’s knowledge of regional systems and their interactions, and its tools for reaching relevant actors in the region.

The agreement also provides for cooperation in terms of technical assistance and training for national and regional authorities in the technologies used in the project, as well as a political dimension that complements the technical work, taking advantage of the IDB’s closer relationship with the countries of the region.

The president of the BIS, Agustín Carstens, has been “enormously” pleased to begin this collaboration, which adds the complementary competencies and strengths of the BIS and the IDB. “Creating a community with the region’s central banks to develop the FuSSE Project has the potential to improve these infrastructures and make the entire financial system work better,” he highlighted.

For his part, the president of the IDB has stated that this initiative will help promote financial inclusion, provide regional integration and reduce poverty in Latin America and the Caribbean.”

Source: dpa

(Referential image source: IDB, Europa Press / dpa)

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Central bank digital currencies, or CBDCs, are attracting increasing interest from the world’s central banks, according to a study by the Bank for International Settlements (BIS).

The study by the Swiss-based body was published on Monday. It is based on data collected through a survey conducted in late 2022 “to 86 central banks of countries representing 82 % of the world’s population and 94 % of global economic output.”

According to the BIS, 93 % of these banks reported having worked in “some form of central bank digital currency” last year. Added to this is the fact that at least more than 50 % of central banks are already working on specific developments or pilot projects.

The survey shows that by 2030 the world could have 15 retail and 9 wholesale CBDCs. “The BIS, which assists central banks around the world, adds that four central banks have already issued their own digital currencies, that of the Bahamas, the Eastern Caribbean, Jamaica and Nigeria.”

The rise in interest in central bank currencies is leveraged by the emergence of cryptocurrencies and stablecoins, as well as their rapid adoption around the world.

M.Pino

Source: bancaynegocios

(Reference image source: Shubham’s Web3, Unsplash)

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The Bank for International Settlements (BIS) announced a second open investment fund focused on green bonds for central banks and other official institutions, the entity said in a statement.

This second fund will be denominated in euros, while the first was denominated in dollars. Together, both funds will manage $ 2 billion in green bonds, although the BIS estimate is that this amount “will continue to grow considerably.”

The BIS noted that both funds have been developed with the “support” of an advisory committee made up of staff from other central banks. These funds are part of the entity’s strategy to help central banks incorporate environmental sustainability objectives into their reserve and capital management.

“The funds promote green finance through considerable investments in environmentally friendly projects such as renewable energy production and energy efficiency and support the adoption of best practices and market standards to deepen the green bond market,” said the Bank.

Bonds eligible for the BIS fund must have a minimum rating of A- and comply with the ‘Green Bond Principles’ of the International Capital Market Association and / or the Climate Bonds Standard published by the Climate Bonds Initiative.

K. Tovar

Source: dpa

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