Known as the central bank for the world’s central banks, the Bank for International Settlements (BIS) announced the approval for the establishment of a BIS Innovation Hub.
The Monetary Authority of Singapore (MAS) responded that it “welcomes the announcement” and the opening of a BIS Innovation Hub in Singapore which aims to “foster collaboration within the central banking community on FinTech issues”.
Two other hubs will also be set up in Basel, Switzerland, and Hong Kong.
The role of the hub is to identify and develop in-depth insights into critical trends in technology affecting central banking, BIS described.
It will also develop public goods in the technology space geared towards improving the functioning of the global financial system, and serve as a focal point for a network of central bank experts on innovation.
MAS affirms that the Singapore Hub Centre will begin operations when the institutional arrangements – including location, staffing arrangements, and office infrastructure – for its establishment have been finalised.
The decision to have a centre here “reflects Singapore’s position as a leading international fintech centre, with an advanced fintech ecosystem”, MAS said.
Ravi Menon, Managing Director of MAS noted there’s a wave of technological innovations weeping across financial services.
He said, “To fully harness the benefits of these innovations while ensuring the resilience of the financial sector, central banks must also innovate – to modernise the technology infrastructure and regulatory arrangements that underpin digital finance and the digital economy.”
“The BIS Innovation Hub initiative provides a compelling platform for central banks to collaborate in this effort, so as to maximise the benefits of cross-border digital connectivity and commerce.”
BIS will implement more innovation hubs across the Americas and Europe in the second phase of implementation, according to this.
Singapore Fintech Association president Chia Hock Lai referenced a report by the International Monetary Fund that showed countries generally foresee the emergence of crypto assets backed by central banks.
Central banks recognise that technology is growing increasingly important, including in the roles they play, he observed.
“BIS recognises that, and that’s why it chose Singapore as one of its bases to have an innovation hub centre,” he said”
Chia added that Singapore has been a leader when it comes to exploring the use of central bank digital currencies – take MAS’ considerations for the utility of Libra in Singapore, for example.
The opening of an innovation centre by BIS in Singapore also opens more doors for research and development in fintech and opportunities to export the country’s fintech services.
The announcement comes as MAS said it will issue up to five new digital bank licenses with Razer, Singtel, and Grab expressing interest in applying.
Featured Image Credit: Good Free Photos, Peter Nguyen