1 Global challenges call for global solutions and collaboration

Throughout my career, including my time at the World Bank and the IMF, I have learnt that collaboration amongst individuals with diverse backgrounds and areas of expertise is a key ingredient for finding successful solutions to the challenges of our times. This is especially true when addressing global issues that we are all facing – challenges as varied as the risks posed by climate change, rapid advancements in technology, such as artificial intelligence or the development of crypto-assets, as well as the ever-evolving cybersecurity landscape.

In such an internationally diverse context, fostering collaboration not only enhances the quality of the solutions we develop but also ensures that their implementation is more adaptable and effective across countries and regions.

As Bundesbank President Joachim Nagel highlighted in his keynote at this summit, the BIS Innovation Hub (BISIH) is a prime example of how central banks can pool their expertise and resources to develop solutions to these global challenges.[1] 

Speaking from my perspective as the Bundesbank board member responsible for the Research Centre, IT, Data and Statistics, and Risk Control, one particularly relevant example of this is the rapid technological transformation of the financial sector. Crypto-assets and stablecoins are playing an increasingly important role. To better understand their implications for our mandate, we are stepping up our research activities into the future of finance. In this context, I have high hopes that initiatives such as the BIS Innovation Hub’s Project Atlas will prove to be valuable tools. Atlas developed a data platform for analysing the economic relevance of crypto-asset markets and decentralised finance. Experiments like this can enable entirely new types of analyses to examine the economics underlying crypto-assets.

2 Central banks stand to benefit from a range of outputs from BISIH projects 

Central banks stand to benefit from a broad range of outputs from BISIH projects, both in terms of subject matter and the maturity levels of the solutions. These outputs go all the way from insights of joint early-stage experimentation and knowledge sharing, to developing centralised data platforms and integrating technical solutions within individual institutions.

I told you just now about how projects like Atlas could allow us to comprehensively analyse crypto-asset markets, which is a highly relevant topic for the Bundesbank‘s Research Centre. An example in a different field, namely quantum-safe cryptography, is the knowledge gained from joint experimentation between IT teams from different central banks, as demonstrated in Project Leap. Project Leap supports the financial system’s resilience against quantum threats by testing and implementing post-quantum cryptography. Project Gaia, meanwhile, demonstrates how individual institutions can collaborate to address a common challenge: it provides a generative AI-based tool that extracts structured data from unstructured company reports, such as ESG disclosures, to assess climate-related risks.

Together, these projects highlight the tangible benefits of BISIH outputs and underscore how innovation can help central banks address both current and emerging challenges in very different areas.

3 Internal cultural and technical ecosystem key to project success

Further strengthening a culture of trust, transparency and close collaboration within and between organisations is essential for driving innovation. Equally important is the further preparation of our technical infrastructure to ensure that BISIH solutions can be operated in a robust, scalable and secure manner. 

Sharing resources, knowledge and best practices is key to successfully leveraging the innovative achievements of individual central banks. We therefore welcome BIS initiatives aimed at building communities and developing shared-source frameworks that allow us to co-develop solutions, maintain control over critical infrastructure and data, and benefit from collective progress. The Bundesbank is fully committed to this approach and plays an active role in developing and implementing BISIH projects.

4 Conclusion

The BIS Innovation Hub is a place where new models can be developed to find joint solutions to a wide range of global challenges that matter a great deal to central banks. By embracing collaboration, innovation and knowledge sharing, we can address these challenges more effectively and shape the future of central banking together.

Footnote:

1. https://www.bundesbank.de/en/press/speeches/future-proofing-central-banks--965812