BIS excerpt from an upcoming report delves into the potential of a "unified ledger."
The Bank for International Settlements (BIS) has unveiled an excerpt of its annual report ahead of schedule.
This sneak peek, revolving around the future outlook of the monetary infrastructure, provides insights into the concept of a “unified ledger.”
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The BIS has taken an innovative approach to central bank digital currencies (CBDC) and tokenized assets by integrating them into a "new type of financial market infrastructure — a unified ledger.”
The latter is projected to be driven by application programming interfaces (APIs). The authors of this proposal voiced their critique on the current financial technology landscape, expressing:
The collapse of crypto and the faltering progress of other tokenisation projects underline a key lesson. The success of tokenisation rests on the foundation of trust provided by central bank money and its capacity to knit together key elements of the financial system.
The proposal highlights a significant shortcoming of present tokenization structures, highlighting their isolated existence. This issue, according to the proposal, could be remedied with a unified ledger, consolidating the ledgers of all involved parties.
The innovative approach entails the integration of programmed reconciliation and messaging, which ensures rapid transactions and simultaneous settlements, all while maintaining a balance between transparency and privacy in a “partitioned data environment.”
Anticipated benefits of a unified-ledger system include significant disintermediation in securities transactions. On the other hand, cross-border operations would necessitate greater collaboration within an intermediated system involving central banks and private payment service providers.
The full details of the BIS proposal, which were teased in the early release of the annual report chapter on June 20th, are eagerly awaited by stakeholders. The complete BIS annual report is slated for release on June 25th.
In other BIS-related news, in May, the institution released an extensive guide on how CBDCs could function in offline transactions.
The world eagerly awaits the release of the BIS annual report, set to further elaborate on the unified ledger's potential to revolutionize the global financial market infrastructure.
