BIS Innovation Hub to Develop DeFi Products in 2022

The Bank for International Settlements Innovation Hub focuses its research on developing “DeFi” products, despite the bank’s suspicious attitude towards the industry.

BIS to get out of the way with DeFi

The Bank for International Settlements is ready to consider DeFi.

According to a press release on Tuesday, the BIS Innovation Hub will launch additional projects in central bank digital currencies and next-generation payment systems to expand its portfolio of inquiries by researching and developing DeFi applications. Hub work also includes new projects in cybersecurity, big data, and financial surveillance technologies.

Agustín Carstens, General Manager of BIS, commented on the expansion of the bank’s R & D operations, saying:

“With the hub center’s expanded network and exciting new projects, the BIS Innovation Hub is now in a stronger position to innovate in a healthy and sustainable way. Contribute to digital technology, the public interest, and work with central banks Community, academia, and private sector. “

Often referred to as the “bank for the central bank,” BIS is a supranational financial institution founded in 1930 to facilitate the payment of reparations imposed on Germany after World War I. Today, the bank caters to the banking needs of more than 63 central banks around the world. Established under an international treaty, BIS is operated by non-elected officials and is operated under immunity.

In 2019, BIS created an innovation hub. This is a research and development department established to help central banks gain in-depth insights into new financial technologies such as CBDC, SupTech and RegTech. Currently, the hub seems to be focusing on CBDC and decentralized finance applications.According to the press release, 13 of the 17 projects that are already active or will be launched in 2022 are involved. CBDC..

The bank is also launching a new project led by the Hong Kong Center, “to investigate whether DeFi technology (blockchain, tokenization, smart contracts, customer identification) can improve SME financing.” I am. Said.

Meanwhile, the Swiss Center and the Swiss Central Bank will test new CBDC-related projects using the Arena, an in-house blockchain built by the Swiss Center of Innovation Hub as a test ground for the Central Bank. According to banks, one of the areas that could be the focus of this project is the DeFi application.

Last December, BIS announced the findings paper He argued that the complete decentralization of DeFi was an illusion. Despite claims for decentralization, the DeFi protocol was subject to several forms of centralized governance that authorities could utilize to regulate space.Last week, BIS general manager Agustín Carsten did the same. comment“The soul of money is trust,” he added, and this trust cannot be outsourced or automated.

Disclosure: At the time of writing this, the author of this work had ETH and several other cryptocurrencies.