The collaboration also seeks to encode policy and regulatory requirements into a common protocol to address challenges like international money laundering. It also considers the emergence of central bank digital currencies (CBDCs), emphasizing the need for global standards and technology compatibility for seamless interoperability with existing payment systems. The BIS is also working on Project Mandala, which aims to automate compliance procedures for CBDCs and tokenized deposits.
Key takeaways:
- The International Monetary Fund (IMF), the World Bank, and the Bank for International Settlements (BIS) have partnered to explore the concept of tokenization to streamline financial processes and enhance global economic development.
- The partnership aims to tokenize the “promissory notes” used when richer countries donate to the World Bank’s funds, which would expedite the transfer of funds to emerging and developing economies.
- Tokenization also presents an opportunity to encode policy and regulatory requirements into a common protocol, addressing challenges such as international money laundering.
- The collaboration is also focusing on the emergence of central bank digital currencies (CBDCs), with a growing need for global standards and technology compatibility to ensure seamless interoperability with existing payment systems.