Latest news with #BankforInternationalSettlements
Coin Geek
29-07-2025
- Business
- Coin Geek
Tokenized bonds have tighter spreads—what does it mean?
Getting your Trinity Audio player ready... When the Bank for International Settlements (BIS) speaks, the financial world listens. Earlier in July, the BIS released a report detailing its findings on tokenized government bonds. It found that, while only $8 billion in such bonds had been issued to date, they had tighter bid-ask spreads than conventional ones. Even in these early stages, tokenization is delivering on its potential for greater efficiency in the financial system. However, the implications are far greater than increased efficiency in the bond market. Let's drill down and discover why. Why tokenized bonds have tighter spreads When it comes to bonds and other financial instruments, the spread is the difference between the bid and ask price. Typically, wider spreads mean less liquidity, higher transaction costs, and greater uncertainty. By default, tighter spreads mean the opposite. Tighter spreads are an objectively good thing from the perspective of market participants, but why would tokenized bonds lead to them? There are a few reasons: Instant settlement – Tokenized bonds on scalable blockchains settle faster. On blockchains like BSV, they can do so in near real-time. This reduces counterparty risk and the amount of time capital must be tied up to facilitate a trade. Tokenization eliminates multiple intermediaries, so it reduces both the time and costs involved in trades. Greater transparency – Scalable public blockchains allow for all trades to be executed and settled on-chain. This means every trade leaves time-stamped, immutable records. These records enable the automation of audits and compliance checks while reducing costs. Automated execution – Audits and compliance checks aren't the only things that can be automated. Coupon payments and reconciliation can also be executed via smart contracts, again reducing overheads and offering transparency that builds market confidence. Increased accessibility – Increased access to markets drives demand which in turn improves price discovery and liquidity. Tokenization opens the door to a broader range of investors, including institutions, fintechs, and even individuals. While these are all different functions, they all lead to the same thing—greater efficiency, reduced costs, and thus tighter spreads. The tokenization of everything is coming Eventually, everything will be tokenized, and the benefits will be realized across all industries. The financial industry will benefit from tokenized bonds, stocks, currencies, and contracts, but so will supply chains, manufacturing, insurance, and many others. The benefits will be the same for all—greater efficiency, transparency, and inevitably lower costs. How big can this get? McKinsey analysts estimate that as much as $1.9 trillion in value will be tokenized by 2030. This doesn't stop at paper or electronic assets; real-world assets (RWAs) like gold bars and oil barrels are also being tokenized on digital ledgers. However, for tokenization to reach its full potential, the world must come to a larger realization: everything will live on one scalable ledger. Blockchain will go the same way as the Internet In the early days of the Internet, there were many different networks: X.25, DECnet, BITNET, AppleTalk, and others. Eventually, they all hit their limitations, and the world realized that TCP/IP was the protocol to build on for an open, global network. Blockchain technology is still in its early days, but it will evolve in the same way the Internet did. Ethereum, Solana, Cardano, Binance Chain, and the others are just like these early Internet networks. Right now, they're hot, and big corporations and institutions are testing them. However, slowly, some are beginning to realize their limits. In March, a report co-authored by the European Central Bank's (ECB) Director General for Market Infrastructure and Payments, Ulrich Bindseil, highlighted how permissioned blockchains are complex and public blockchains are the better option. This is a clear signal that some players within large institutions are already beginning to see the bigger picture. While many believe in a multi-chain world with various chains communicating via solutions like Chainlink or dozens of different layer two solutions settling on Ethereum, the reality is that there will only be one global chain with every transaction happening on the base layer. Why? For the same reason, at the heart of the BIS report on tokenized bond spreads is efficiency. The costs of running nodes for and operating across multiple blockchains are prohibitive, the security vulnerabilities introduced by bridges and rollups are now well understood, and the benefits of time-stamping are lost when multiple blockchains keep different records. The most scalable, low-fee blockchain will win Naturally, the tokenization of everything will require legal and regulatory compliance. In the real world, business and commerce cannot be conducted without considering the law. Yet, if multiple blockchains say different things, which one wins in a dispute? It makes no sense to have many different blockchains. When the world catches up to this reality, it will settle on the most scalable, cost-efficient blockchain that enables them to easily comply with the laws they must abide by. There's only one blockchain that fits the bill—the original Bitcoin protocol—BSV. Already scaling to one million transactions per second (TPS) with fees of fractions of a penny, and with full smart contract capability, BSV has no competition when it comes to legally compliant, enterprise-grade blockchains. Furthermore, the most scalable blockchain has a hidden edge. Every conceivable use case for blockchains, will make building on BSV the rational choice for governments, institutions, and enterprises. Watch: Tim Draper talks tokenization with Kurt Wuckert Jr. title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Fintech News ME
21-07-2025
- Business
- Fintech News ME
DFSA Report: Quantum Computing and AI Introduce New Risks to Finance
As implementation of emerging technologies accelerates, operational resilience, technology risk management, and adaptive oversight will be fundamental to maintaining stability in financial markets. Regulators and institutions must act to raise awareness of emerging threats, enhance readiness, and strengthen technology governance, global financial regulators and experts said during a closed-door meeting. The session, hosted by the Dubai Financial Services Authority (DFSA) at the Dubai Fintech Summit 2025 in May 2025, bought together 70 representatives from 18 financial regulatory authorities from across the globe, alongside senior experts from the Bank for International Settlements (BIS) Innovation Hub and the International Monetary Fund. These participants examined how cybersecurity, AI, and quantum technologies intersect, discussing practical measures to address the evolving risk landscape, and reflecting on current progress and persistent gaps. An evolving cyber threat landscape Participants warned of the evolving cyber threat landscape, highlighting that cyber threats are becoming more sophisticated and harder to control because they easily cross borders and affect many different industries at once. They emphasized the shift from ransomware encryption towards double extortion, which combines data encryption with threats to leak stolen information, as well as the growing use of AI for social engineering. They also noted that threat actors are increasingly attacking newer technologies such as Internet-of-Things (IoT) devices with physical sensors and supply chains, and are using legitimate tools to evade detection mechanisms. To manage these risks, these experts agreed on the need to balance innovation with robust cybersecurity. They advised on strengthening basic defenses, such as keeping software up to date, dividing networks to limit damage, training employees to spot threats, using strong access controls and multifactor authentication, sharing information about threats, and carefully managing risks from third parties like suppliers and partners, while also emphasizing the importance of cross-sector and public-private collaboration as cyber-attacks become orchestrated at industrial scale and are no longer isolated events. Regulators, meanwhile, should provide guidance on quantum and AI-related risks, and raise awareness about these threats. They should also embed cybersecurity into supervisory assessments, and build their own skills and suptech tools to monitor and respond to cyber and emerging technology risks. Quantum risk evolution Quantum risks were another key topic of discussion. Quantum computers, which utilize quantum mechanics to process information, have the potential to revolutionize fields like cryptography, drug discovery, and complex optimization by solving problems exponentially faster than classical computers. However, these same capabilities also pose significant cybersecurity risks. Such powerful quantum computers could theoretically break widely used encryption methods that currently secure online banking, payment systems, and other digital payments. And while these computers, called cryptographically relevant quantum computers (CRQCs), don't exist yet, they could emerge by 2030-2040, emphasizing the urgency to prepare for a post-quantum world now. Participants warned that the financial sector is likely to be among the prime targets for quantum threats because of the high value of financial assets transactions financial institutions process. Though the space benefit from strong governance structures and prudential frameworks, important gaps persist, including limited awareness of quantum threats, incomplete inventory of vulnerable systems, and slow global standardization and interoperability. Against this backdrop, experts highlighted that regulatory authorities have a vital role to play in raising awareness on quantum threat, and supporting gradual transition planning. They should also consider introducing regulatory sandboxes for experimentation, cross-border collaboration, and scenario planning that simulate quantum-risk impacts to better prepare for the challenges that quantum technologies may bring. AI risk oversight Finally, the group examined the risks associated with the growing adoption of AI in financial services. First, they noted that financial institutions process large volumes of highly sensitive personal and financial data that are increasingly used to train complex machine learning (ML) models. This enhances the risks of data breaches and intellectual property theft. They also emphasized that AI expands the attack surface for cyber threats, and introduces new points of failure not present in traditional information and communication technology infrastructure, such as data pipelines and ML models. Meanwhile, threat actors are increasingly incorporating AI into their offensive toolkits to enhance, automate, and scale cyberattacks, as well as to adapt to counter-defensive measures. Experts also highlighted the growing resilience on a limited number of dominant AI providers, contributing to supply chain concentration risk and heightening the risk of systemic disruptions in the event of supply chain incidents. They also drew attention to the expanding influence of bigtech companies across the AI ecosystem. Participants encouraged regulators to map supply chains and assess concentration risks across critical technology providers. They also stressed the importance of balancing innovation with adequate oversight, advising for principle-based approaches, and an adaptive, learning-focused posture to respond more effectively to the evolving nature of AI applications. The potential of quantum computing and AI Quantum computing and AI are transforming technologies poised to transform the financial services and banking industry by accelerating secure transaction processing, revolutionizing risk analysis, optimizing complex portfolios, and enhancing fraud detection. McKinsey estimates that quantum computing use cases in the finance industry could create US$622 billion in value by 2035. Meanwhile, generative AI (genAI), a subset of AI that creates new content, could add as much as US$340 billion a year in additional value, representing 2.8% to 4.7% of total industry revenues, largely through increased productivity. However, genAI also introduces risks, such as deepfake and fraud. Deloitte's Center for Financial Services predicts that genAI could enable fraud losses to reach US$40 billion in the US by 2027, from US$12.3 billion in 2023. Despite these challenges, adoption is accelerating rapidly. According to the latest McKinsey Global Survey on AI, 78% of respondents said that their organizations used AI in at least one business function as of late 2024, up from 55% a year earlier. Boston Consulting Group (BCG)'s AI Radar found that one in three financial institutions plans to spend over US$25 million on AI in 2025, and some will spend in the range of 0.5% to 1% of revenues towards AI technologies.
Sky News AU
20-07-2025
- Business
- Sky News AU
'Money that can expire': RBA laying groundwork for a dystopian financial reality where 'money is given a brain and then the switch is handed to someone else'
Something is happening to money. Not the kind of change you notice right away. The kind that takes shape quietly, in boardrooms and briefing notes. While Australians argue about interest rates and property prices, a different conversation is unfolding elsewhere—one that most people haven't heard, let alone been invited to join. In Basel, Switzerland, a group of unelected officials is reshaping the future of money. The Bank for International Settlements (BIS) doesn't chase headlines or need public attention. It shapes monetary policy by guiding central banks around the world. And Australia's Reserve Bank isn't sitting this out. Quite the opposite. Through a pilot called Project Pine, the RBA has begun laying the groundwork for a new financial architecture—one built not just on digital money, but on programmable money. And that distinction matters. Programmable money isn't just a digital version of what you already use. It's money with logic built in. Money that can be told what to do. Or what not to. Money that carries conditions. Parameters. Instructions. Money that stops being neutral. Now, let me clarify: I'm not here to scare you. But I am here to paint an accurate picture. We're witnessing a shift in who gets to decide how your money functions—how it moves, where it goes, what it touches, and what it refuses to. It's a shift in who holds the final say: the individual, or the system. Programmable money means every single transaction can be pre-shaped. Every permission can be baked into the code. And every restriction can be enforced automatically, without warning and without recourse. This is money that can expire. Spend it within 30 days or it disappears. The justification? Stimulus. Drive consumption. Keep the economy ticking. This is money that can be geographically constrained—valid in one postcode, invalid in the next. Use it in Sydney, fine. Try to spend it in Perth? Blocked. This is money that knows what it's being spent on, and money that can say 'no' when it doesn't like the answer. No gambling. No late-night purchases. No donations to flagged organisations. No payments to 'non-compliant' vendors, not because you did anything wrong, but because the system doesn't approve. And this system doesn't need a debate in Parliament to make those changes. It just needs a policy tweak. A regulatory update. A line of code. Taxation becomes real-time. No filing, no refunds, no deductions. Every transaction taxed at the point of sale. Rates adjusted dynamically. Levies introduced on the fly. You don't vote on it. You don't see it coming. It just appears. And if a purchase doesn't comply—if it violates the parameters set by regulators or AI-driven compliance tools—it can be reversed. This isn't a vision for the distant future. This is happening. Now. The BIS has published detailed technical papers on how programmable money can function. The infrastructure already exists. The pilots are underway. Australia was one of the first to sign on. The RBA's digital currency trial began last year. Since then, it has collaborated with international financial bodies and tech firms to explore what may soon become the foundation of a new global monetary system. A system where money itself becomes a tool of policy enforcement. None of this has emerged in isolation. This is not an isolated project. It's part of a larger trend—a slow, deliberate expansion of regulatory power that has taken shape over the past decade. Behind the scenes, Australia's financial regulators have been building the scaffolding quietly, incrementally, with no fanfare—just a steady layering of oversight, compliance, and surveillance. Anti-money laundering reforms. Digital asset frameworks. Know-your-customer mandates. Real-time transaction monitoring. Rules that, in isolation, sound reasonable—even necessary. But in aggregate, they form the machinery of a system capable of managing a national economy in real time. A system where intervention is no longer occasional—it's constant. Silent. Automatic. Built into the fabric of the transaction itself. That's how systemic change happens in a country like Australia. Not through sweeping public mandates. Not with dramatic declarations. But through regulation. Compliance guidelines. Policy notes. The kind of documents few people read, but which carry enormous weight. And there's another layer here: external pressure. Because Australia doesn't act in a vacuum. Its economy is plugged into a broader system of global finance. Step too far out of sync, and the penalties are swift—higher interest rates on the global market, reduced access to capital, reputational damage, and trade friction. That's not conspiracy talk. That's how modern financial systems work. It's why central banks and regulators around the world coordinate so closely. It's why 'global best practice' is more than a suggestion—it's a standard. A code. Deviate from it, and the cost is real. That's also why Australia doesn't just follow these international frameworks. It helps write them. Its regulators don't just attend global forums—they help shape the outcomes. They co-author the reports. They return home with policies drafted abroad and apply them domestically—often without public discussion, and usually without opposition. These imported frameworks arrive with the force of inevitability. They're wrapped in the language of modernisation, inclusion, resilience. But baked into them are assumptions about how money should work—and who gets to decide. Once embedded, these systems become hard to challenge—let alone reverse. Programmable money represents more than a financial upgrade. It represents a change in the relationship between the individual and the state. A change in how freedom is understood in a digital economy. Because when money becomes programmable, it becomes conditional. And when it becomes conditional, it becomes political. It can be used to shape behaviour, enforce compliance, reward the approved, and marginalise the disobedient. That's not dystopian speculation. It's a practical consequence of giving money a brain—and then handing the switch to someone else. None of this is an argument against innovation. When handled responsibly, technology can improve access, reduce fraud, and streamline operations. But the same tools that offer convenience can also enforce conformity. And the more invisible that enforcement becomes, the less room there is for dissent—and for freedom. Australians deserve to understand what's being built before it's too late to ask why. The questions should come now, while there's still the opportunity to ask them. John Mac Ghlionn is a researcher and essayist who writes on psychology and social relations. He has a keen interest in social dysfunction and media manipulation.
CNA
11-07-2025
- Business
- CNA
Trade tensions, heightened uncertainty cloud the outlook for growth: BIS
Hyun Song Shin, Economic Adviser and Head of the Monetary and Economic Department of the Bank for International Settlements - the world's leading central bank umbrella group - underscores the impact of policy uncertainty and tariffs in weakening global economic activity.
Bloomberg
10-07-2025
- Business
- Bloomberg
The UK Is Struggling to Shake Off the Bond Vigilantes
I'm Craig Stirling, a senior editor in Frankfurt. Today we're looking at how the UK faces more financial-market scrutiny than its peers on public finances. Send us feedback and tips to ecodaily@ And if you aren't yet signed up to receive this newsletter, you can do so here. 'High levels of public debt are a significant vulnerability that governments can no longer ignore,' was what Bank for International Settlements chief Agustin Carstens warned in his final speech in June. That echoed a cacophony of alarm bells from global monetary officials over the past months and years.
