The Bank for International Settlements (BIS) has opened two further centres for its growing ‘Innovation Hub’ network.
Switzerland-headquartered BIS launched the network in 2019 to identify and develop insights into fintech trends, to explore the development of public goods to improve the functioning of the global financial system, and to serve as a focal point for central bank innovation experts.
Innovation Hub centres are already up and running with the Hong Kong Monetary Authority, Monetary Authority of Singapore and the Swiss National Bank.
It has today (16 June) opened a ‘Nordic Centre’ in Stockholm, hosted by the Sveriges Riksbank in partnership with the Danmarks Nationalbank, Central Bank of Iceland and Norges Bank. This centre’s launch comes hard on the heels of the opening of a Bank of England-hosted centre last week.
An Innovation Hub centre hosted by the European Central Bank/Eurosystem (Frankfurt and Paris) is due to open within the coming months. A further centre is also planned with the Bank of Canada (Toronto) while, in January, BIS also signed a memorandum of understanding for a ‘strategic collaboration’ with the Federal Reserve System (New York).
‘Opportunities presented by fintech’
“The BIS Innovation Hub Nordic Centre in Stockholm is testament to the innovative culture of the central banks of Denmark, Iceland, Norway and Sweden. It reflects their recognition of the opportunities presented by fintech, as well as their drive to meet its challenges as they pursue their mandates for financial stability,” said BIS general manager Agustín Carstens.
“The BIS Innovation Hub has emerged as a key driver of central bank fintech experimentation,” said Riksbank governor Stefan Ingves. “The Nordic Centre represents an important step in advancing this mission by the BIS in partnership with the central banks of Denmark, Iceland, Norway and Sweden and we are looking forward to developing key public goods that facilitate financial evolution and stability.”
Riksbank first deputy governor Cecilia Skingsley told a media briefing that the Swedish Parliament had agreed a five-year commitment of 30 million krona (about £2.5m) per year to host the Innovation Hub, with three Riksbank staff to be assigned to its activities. The other Nordic central banks will each assign one staff member.
The Innovation Hub’s current work programme, announced in January, is focused on six areas: central bank digital currencies (CBDC), which has become the highest-profile topic; SupTech and RegTech; ‘next generation’ financial market infrastructures; open finance; cyber-security; and green finance. Work is spread among the Hub centres. Specific projects have not yet been finalised for the Nordic centre.
The Riksbank hosted a virtual event to mark the opening, with speakers including overall Innovation Hub head Benoît Cœuré.
‘Important global initiative’
The Bank of England-hosted centre was inaugurated on 11 June, also with a virtual event.
“As a central bank, we recognise the importance of innovation for the global financial system and look to support its safe deployment wherever possible. This requires collaboration between public authorities in all jurisdictions, and the BIS Innovation Hub is an important global initiative for achieving this,” said Bank of England governor Andrew Bailey.
UK chancellor Rishi Sunak said: “The UK is known for pushing the boundaries of digital finance so it’s great to have the new Innovation Hub opening here. Its work will help central banks to support safe innovation, and boost our efforts to capture the extraordinary potential of technology.”
Bailey yesterday addressed the annual conference (held in virtual format) of lobby group TheCityUK, delivering a speech focused on payments and digital currency.
BIS announced its plans to expend the Hub network, including the London presence, almost a year ago, with Carstens at the time saying that it wanted to “create a global force for fintech innovation”.
*** On the topic of CBDC, BIS last week published a 22-page paper entitled ‘CBDCs beyond borders: results from a survey of central banks’; and, separately, a 20-page working paper entitled ‘Central bank digital currency: the quest for minimally invasive technology’.