BIS Announces Crypto Market Intelligence Platform in the Face of DeFi and Stablecoins Collapse

The Bank for International Settlements (BIS) Innovation Hub has announced the creation of a new set of projects, updating its work program for the year 2022.

According to the BIS, this comes in light of the recent collapse of stablecoins and decentralized finance (DeFi) tokens.

Actions include, for example, a digital asset market intelligence platform; a post-quantum cryptography; and actions to provide more security for a retail CBDC (central bank digital currency).

As informed by the BIS, the actions will include the first three projects of the next Eurosystem Center and the explorations in cybersecurity.

In addition, the BIS said the action will be in conjunction with all 19 eurozone central banks and the Central Bank of Europe.

The hub will also expand its portfolio in the areas of green finance and supervisory and regulatory technology.

crypto intelligence platform

Regarding the crypto intelligence platform, the BIS said that the collapse of DeFi and stablecoins highlighted the difficulty in assessing the risks and economic potential of these assets.

This is because it is the companies themselves, which are generally unregulated, that report most of the data on the underlying assets, their trading volumes and their market value.

“Individual datasets and available solutions do not provide comprehensive information. In addition, they lack transparency,” the BIS said.

Based on this, the idea is to create an open source market intelligence platform. It will clarify the market value of assets, economic activity and risks to financial stability.

post quantum cryptography

The second BIS initiative has to do with post-quantum cryptography. After all, it is believed that quantum computers will break the encryption used by both central banks and the private sector.

As such, it could jeopardize payment and settlement systems.

“This threatens confidentiality and can undermine the integrity of payment systems. Given the long-term sensitivity of financial data, this vulnerability must be addressed well before the advent of quantum computing,” the BIS said.

In this sense, the idea is to test crypto solutions that can support the processing power of quantum computers.

In addition, the BIS will test use cases in various payment systems and see how the introduction of quantum-resistant cryptography will affect their performance.

Transparency of climate-related disclosures

Another BIS action has to do with the impact of climate change on financial stability.

To that end, the BIS will partner with the Bank of Israel and the Hong Kong Monetary Authority on a new study on CBDCs and cybersecurity.

The BIS will also begin a new phase of its green finance Genesis project.

Cybersecurity for retail CBDC

Finally, on the security of retail CBDCs, the BIS said it will explore solutions to allow intermediaries to provide CBDCs to users. But that’s without the related financial exposure.

In this way, it will be possible to reduce risks and costs in the process and give a strong focus on cybersecurity.

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