Latest news with #BankforInternationalSettlements
Forbes
a day ago
- Business
- Forbes
Exporting Trust: How Blockchain Finance Can Redefine Trade Agreements
Programmable contract on blockchain While the spotlight in Web3 remains fixed on ETFs, token listings, and stablecoin frameworks, a quieter but equally consequential evolution is taking shape at the edge of global commerce. In the last six months alone, the Bank for International Settlements expanded its cross-border wholesale CBDC pilot, Project mBridge, to include over 26 observing members. Meanwhile, the Monetary Authority of Singapore extended Project Guardian, testing tokenized trade finance and digital asset settlement with banks including JPMorgan, DBS, and Standard Chartered. Hong Kong Monetary Authority also launched Project Ensemble to develop innovative financial market infrastructure enabling seamless interbank settlement of tokenised money, initially focusing on tokenised deposits to support the growth of Hong Kong's tokenisation market. On the protocol side, DeFi-native projects like Centrifuge are tokenizing invoices and short-term credit, while firms like Enclave Markets are developing encrypted execution environments for confidential trading. These aren't isolated experiments - they're signs of a maturing thesis: that programmable finance can redefine the foundations of international trade. Today's trade infrastructure is a patchwork of legal fictions and trust intermediaries - letters of credit, bills of lading, third-party guarantees - many of which exist solely to simulate trust. Each one adds friction, cost, and settlement lag. Blockchain-based systems flip that dynamic by anchoring records on cryptographically secure, shared ledgers. This is more than just a technical upgrade. As David Wells, CEO of Enclave Markets, puts it: 'When counterparties from different jurisdictions can rely on cryptographically secured records rather than opaque intermediaries, the trust barrier that typically adds friction and cost to international trade diminishes significantly.' He adds that, 'At Enclave, we use secure enclave technology to enable privacy-preserving verification. This means counterparties can validate critical deal terms or performance metrics without exposing sensitive business data. It's a foundational shift - you get transparency and confidentiality at the same time, something legacy systems just aren't built for.' Where platforms like the now-defunct TradeLens stumbled due to governance limitations, decentralized or privacy-preserving infrastructure offers an alternative. Enclave, for instance, uses secure enclave hardware to enable private yet verifiable trades - part of a broader movement that includes confidential computing platforms and zero-knowledge middleware. Beyond data transparency, programmable finance introduces automatic enforceability. Smart contracts don't just log terms - they execute them. When conditions are met (e.g., delivery confirmed via oracle or IoT sensor), payment flows instantly. If conditions fail, penalties or reversions execute without legal intervention. This mechanism is already live in parts of the DeFi world. MakerDAO and Centrifuge have deployed real-world asset vaults tied to tokenized invoices and short-term credit. As reported, Maker's RWA vaults now account for a significant share of its fee income. Denis Petrovcic, CEO of Blocksquare, frames it this way: 'Banks shift from paperwork gatekeepers to liquidity nodes, and insurers underwrite only risks the code can't cover.' He continues: 'In our real estate tokenization work, we've shown how anchoring legal agreements - like mortgage registration or loan collateralization - on-chain creates enforceable economic rights that are provable in real time. This reduces the need for buffer escrows and limits disputes. When you apply this to cargo or trade finance, it's easy to imagine similar benefits.' His company recently completed one of the first legally notarized tokenized real estate deals tied to a national land registry - a model that could extend to warehousing, shipping hubs, and other trade-linked assets. The Dubai Land Department (DLD) has also launched the MENA region's first government-backed tokenized real estate platform, Prypco Mint, which enables fractional ownership of Dubai properties by minting real estate title deed tokens. This is supported by Dubai's Virtual Assets Regulatory Authority (VARA), marking the first time a government real estate authority in the Middle East has implemented a public blockchain-based tokenization of property title deeds, pioneering a more accessible, transparent, and efficient real estate market. Perhaps the most profound shift is this: trade agreements, once enshrined in legalese and negotiated by diplomats, are now being expressed as code. Project mBridge envisions programmable cross-border CBDC rails. MAS' Project Guardian is piloting asset tokenization and real-time DvP with institutional players. And emerging trade finance platforms are layering compliance, risk, and audit rules into smart contracts rather than spreadsheets. This isn't hypothetical. 'We're already seeing smart contracts do things that used to take banks days or weeks to handle,' says Nicolas Vaiman, CEO of Bubblemaps. 'Instant escrow, peer-to-peer lending, collateral management. The technology simply offers more. And we're just scratching the surface - as more data sources and real-time proofs come online, I think blockchain-based finance will become the default operating system for trade, not an optional enhancement.' The results: fewer intermediaries, faster time to cash, and real-time visibility across jurisdictions. For decades, the global trade system relied on institutional credibility: the issuing bank, the national regulator, the trusted auditor. But programmable finance rewires that system to depend on logic, not legacy. To be clear, this transition is still in its early innings. Regulatory coordination, technical standards, and enterprise integration remain uphill challenges. But the pieces are aligning: on-chain attestation, tokenized RWAs, fiat-backed stablecoins, and decentralized identity protocols are rapidly evolving into an interoperable trust stack. The result isn't just digitized trade. It's a new form of enforceable, exportable trust—written in code, and verified on-chain.
Zawya
27-05-2025
- Business
- Zawya
BIS urges governments to curb 'relentless' rise in debt
TOKYO: Governments across the globe must curb their "relentless" rise in public debt as higher interest rates make fiscal paths for some countries unsustainable, Agustin Carstens, General Manager of the Bank for International Settlements said on Tuesday. Large deficits and high debt appeared sustainable when interest rates were kept low after the global financial crisis, allowing fiscal authorities to avoid making hard choices such as cutting spending or raising tax, he said. "But the days of ultra-low rates are over. Fiscal authorities have a narrow window to put their house in order before the public's trust in their commitments starts to fray," Carstens said in a speech delivered at a conference hosted by the Bank of Japan in Tokyo. "Markets are already waking up to the fact that some paths are not sustainable," he said, warning that financial markets could suddenly destabilise in the face of large imbalances. "That is why fiscal consolidation in many economies needs to start now. Muddling through is not enough." The warnings came in the wake of recent steady rises in bond yields in the United States, Japan and Europe, driven in part by market expectations that their governments will ramp up spending funded by increased debt. Defaults on public debt can destabilise the global financial system and threaten monetary stability as central banks may be compelled to finance government debt, leading to fiscal dominance over monetary policy, Carstens said. "The result would be rising inflation and sharp exchange rate depreciations," he said. "In light of these considerations, it is essential for fiscal authorities to curb the relentless rise in public debt." The BIS aims to foster international monetary and fiscal cooperation among central banks and to serve as a bank for central banks. Carstens said many countries will face pressure for more public spending due to population ageing, climate change and higher defense spending. "Fiscal authorities must provide a transparent and credible path to safeguard fiscal solvency, ideally underpinned by stronger fiscal frameworks. They must then follow through on their commitments," he said. "Central banks cannot be the only game in town." For monetary policy, Carstens said central banks should not be expected to stabilise inflation "at very short horizons and within narrow ranges." "This is particularly important because, as recent events have shown, inflation will partly depend on factors that are not under central banks' control," he said. (Reporting by Leika Kihara)
Reuters
27-05-2025
- Business
- Reuters
BIS urges governments to curb 'relentless' rise in debt
TOKYO, May 27 (Reuters) - Governments across the globe must curb their "relentless" rise in public debt as higher interest rates make fiscal paths for some countries unsustainable, Agustin Carstens, General Manager of the Bank for International Settlements said on Tuesday. Large deficits and high debt appeared sustainable when interest rates were kept low after the global financial crisis, allowing fiscal authorities to avoid making hard choices such as cutting spending or raising tax, he said. "But the days of ultra-low rates are over. Fiscal authorities have a narrow window to put their house in order before the public's trust in their commitments starts to fray," Carstens said in a speech delivered at a conference hosted by the Bank of Japan in Tokyo. "Markets are already waking up to the fact that some paths are not sustainable," he said, warning that financial markets could suddenly destabilise in the face of large imbalances. "That is why fiscal consolidation in many economies needs to start now. Muddling through is not enough." The warnings came in the wake of recent steady rises in bond yields in the United States, Japan and Europe, driven in part by market expectations that their governments will ramp up spending funded by increased debt. Defaults on public debt can destabilise the global financial system and threaten monetary stability as central banks may be compelled to finance government debt, leading to fiscal dominance over monetary policy, Carstens said. "The result would be rising inflation and sharp exchange rate depreciations," he said. "In light of these considerations, it is essential for fiscal authorities to curb the relentless rise in public debt." The BIS aims to foster international monetary and fiscal cooperation among central banks and to serve as a bank for central banks. Carstens said many countries will face pressure for more public spending due to population ageing, climate change and higher defense spending. "Fiscal authorities must provide a transparent and credible path to safeguard fiscal solvency, ideally underpinned by stronger fiscal frameworks. They must then follow through on their commitments," he said. "Central banks cannot be the only game in town." For monetary policy, Carstens said central banks should not be expected to stabilise inflation "at very short horizons and within narrow ranges." "This is particularly important because, as recent events have shown, inflation will partly depend on factors that are not under central banks' control," he said.
Finextra
26-05-2025
- Business
- Finextra
Why Fintech Growth Still Depends on Physical Infrastructure: By Denys Boiko
Over the past decade, digital financial services have expanded rapidly across emerging markets. From mobile wallets to embedded finance and open banking, the technical possibilities have matured. Yet even as apps grow more sophisticated, real-world constraints persist. Fintech development has, in many cases, outpaced the environments it seeks to transform. Product roadmaps accelerate, but user uptake remains uneven. In high-growth developing regions, platforms often encounter limits because physical infrastructure and behavioural habits lag behind digital ambition. According to a recent Bank for International Settlements report, cashless payments per capita in emerging markets rose by 29% in 2023, while cash withdrawals remained stable, underscoring cash's enduring role in everyday transactions. This gap is most visible where innovation meets inclusion. While KYC automation, digital credit evaluation, and real-time payment define today's fintech landscape, large segments of the population continue to rely on cash and remain only partially connected to digital networks. Bridging this divide isn't just a product challenge — it's a question of rethinking business models and understanding behaviours that define how financial systems are used in practice. The next wave of fintech growth will likely come not from entirely new products, but from seamless integration with existing environments. Aligning Innovation with Access There's a tendency in fintech to view progress as linear: build a better interface, streamline a process, then scale. But scale does not occur in a vacuum. It depends on systems — economic, social, and physical — that enable people to adopt new services. While technology providers focus on scalability, user experience, and automation, many target users remain disconnected from digital platforms—by choice, by necessity, or by lack of access. Smartphone penetration, mobile data costs, trust in digital services and even basic identification systems vary drastically from one market to another. The result is a fundamental mismatch between how fintech solutions are perceived and how users can realistically access them. This doesn't mean fintech has failed. It means the next phase of growth will require a deeper understanding of what stands between product and participation. True scale will come not from adding yet another feature, but from integrating digital services into existing ecosystems, habits and touchpoints that people already trust. Rethinking Integration Future fintech success in emerging markets hinges on how well digital services integrate within hybrid ecosystems — part online, part cash-based. Self-service kiosks. Once dismissed as transitional, kiosks are re-emerging as cost-efficient conduits in low-connectivity environments. By reducing dependency on smartphones, they allow users to deposit or withdraw funds, pay bills and access digital platforms without owning a device or enduring high data costs. In regions where trust in apps remains low, a visible, physical kiosk lends credibility that purely digital interfaces cannot match. Agent networks. Leveraging local agents — such as corner shops, post offices or telecom retailers — enables assisted onboarding and cash-in/cash-out services. These networks bridge the trust gap through face-to-face interactions, helping users navigate KYC procedures and building confidence. In several markets, well-incentivised agents have been shown to increase onboarding rates by up to 50%, while reducing customer acquisition costs significantly. In each case, the goal is to reduce friction between cash and code — making digital finance an extension of, not a total replacement for, everyday routines. A Broader View of Infrastructure The core challenge is not to digitise everything immediately, but to design for coexistence — to accept that cash economies and physical touchpoints will remain part of the financial ecosystem for years to come. This calls for more adaptable systems: infrastructure that respects existing behaviours; interfaces that support low-data and low-trust environments; and products that don't assume continuous connectivity or seamless onboarding, but instead offer alternate routes into formal finance. To succeed, fintech must embrace a hybrid model that harmonises digital innovation with established physical pathways. Each market demands its own balance. Too often, solutions are imported wholesale, ignoring local dynamics. By designing systems that respect existing behaviours and environments, fintech can transform promise into participation. Building for Context Fintech is often described as the convergence of finance and technology. Today, the critical convergence is between digital ambition and physical execution. A superior product means little if it cannot reach the right users, in the right context, at the right time. As fintech matures, the focus shifts from invention to integration.
TimesLIVE
20-05-2025
- Business
- TimesLIVE
No Brics asset pile big enough to rival dollar: Brazil central bank director
Brazil's central bank does not see any realistic prospect of emerging nations in the Brics group creating markets large enough to topple the US dollar's dominance in the next 10 years, monetary policy director Nilton David said on Monday. There is not a meaningful stock of Brics-denominated assets that could offset the dollar now, David told a central bank webcast. 'I don't think that will change over the coming decade.' The director acknowledged alternative settlement tools could gain traction and help boost bilateral trade deals, but this was nowhere near enough to dislodge the dollar in any visible horizon. The Brics acronym refers to the five major emerging economies of Brazil, Russia, India, China and South Africa, which have been working together to address global issues. The group recently added six other members. Reuters reported in February Brazil's presidency of Brics this year would shelve talk of a common currency, focusing instead on ways to trim dollar reliance, such as linking payment systems and exploring blockchain standards set by bodies such as the Bank for International Settlements. US President Donald Trump has repeatedly cautioned the Brics group — whose original members were Brazil, Russia, India and China — against attempts to challenge the supremacy of the dollar. Founded in 2009 and soon expanded to add South Africa, the group has recently included Egypt, Ethiopia, Indonesia, Iran and the UAE, making it a growing diplomatic counterweight to traditional Western powers. David also said he views bitcoin as 'a speculative currency by nature', noting Brazil's $340bn (R6.3-trillion) foreign exchange reserves remain overwhelmingly in dollars because nearly all the country's external transactions are settled in the US currency. According to the director, the central bank wants to preserve the liquidity and depth of its foreign exchange market but it acknowledges these features have side effects. David noted the Brazilian real has a 'natural' correlation with risk assets, making it more volatile. It is often the pivot for portfolio managers, he said, adding this attracts investors who hold the currency only briefly, causing demand to swing sharply.
