Financial innovation takes a new turn with the inauguration of the Toronto Innovation Center by the Bank for International Settlements (BIS) in collaboration with the Bank of Canada. The global regulator had already expressed its desire for MNBC and tokenization. These are now coming to fruition.
In theory, announced on June 13, this center aims to advance financial technologies, strengthening Canada’s role in the evolution of cryptocurrencies and digital financial infrastructure.
In fact, presented as a step forward for financial technologies, this initiative nevertheless raises questions about the true nature of the innovation it promotes. Explanations.
A Hub for financial innovation
THE Toronto Innovation Center will focus on six priority themes for the BRI:
- central bank digital currencies (CBDC),
- green finance,
- cybersecurity,
- open finance,
- regulatory and supervisory innovation,
- next generation financial market infrastructures.
An obvious project for Tiff Macklem, governor of the Bank of Canada, who explains:
“As the financial sector continues to evolve, we need to innovate in different areas and apply skills not traditionally associated with central banks. »
For his part, Agustín Carstens, general director of the BIS, described the inauguration of the center as
“an important step in the BIS’s efforts to build the financial system of the future. He expressed enthusiasm about working with the Bank of Canada and other central banks to promote a more modern, efficient and inclusive financial system. »
MNBC and tokenization: BIS crypto projects
In January 2024the BIS unveiled its work program for the year, including the second phase of MNBC privacy testing and the launch of a blockchain-based tokenization project.
This project aims to explore the tokenization of assets in the financial system, in collaboration with the central banks of France, Japan, South Korea, Mexico, Switzerland, the United Kingdom and the United States, while tightening the vice around the regulation of stablecoins.
Called “Agora Project”, this initiative seeks to use blockchain technology to create a unified ledger which links central bank wholesale funds with commercial bank tokenized deposits.
Canada’s growing role is not innocent either, as the country has also strengthened itself through its regulatory efforts. Indeed, the Canadian regulator recently sought feedback on crypto-asset exposure disclosure requirements, highlighting the importance of transparency and consumer protection in this rapidly evolving sector.
However, and here we come towards the final word, digging a little deeper, this innovation looks more like a attempt by traditional institutions to claim the advantages of cryptocurrencies without accepting the Fundamental principles. It appears that this future is carefully controlled by the same institutions that wish to centralize and monitor every aspect of the digital economy, unlike the spirit of cryptocurrencies like Bitcoin.
The inauguration of the Toronto Innovation Center by the BIS and the Bank of Canada is being touted as an important milestone in the evolution of digital financial infrastructure. Yet scratching the surface reveals an attempt to centralize and control what was initially designed to be decentralized and free. Two different visions face each other. With on one side the old world which seeks to protect itself and regulate technological innovation so that it does not escape its control. And on the other hand, the players in new finance who want to free themselves from the rules that prevent them from fully developing their new products and taking market share from the historic institutions that are the banks.
