bis bank

What Is the Bank for International Settlements (BIS) and Its Role in Global Finance?

The Bank for International Settlements (BIS) is a cooperative institution for central banks, often referred to as the “central bank for central banks.” Its core mandate is to provide a platform for central bank communication, facilitate payment settlement and risk monitoring, and support the development of global banking standards.

A “central bank” can be understood as the chief monetary authority of a country, responsible for issuing currency, maintaining financial stability, and ensuring the security of payment systems. Through its committees and Innovation Hub, the BIS coordinates cross-border projects and research, such as experiments in cross-border payments and improvements to financial market infrastructures.

On the regulatory side, the BIS serves as the secretariat for key organizations like the Basel Committee on Banking Supervision (BCBS), assisting countries in formulating frameworks for bank capital requirements and risk exposure. These frameworks influence how banks interact with crypto assets, including custody and settlement processes.

How Is the BIS Connected to Web3?

The BIS’s main touchpoints with Web3 are in central bank digital currencies (CBDCs), asset tokenization, and cross-border settlement trials. It organizes technical validation and policy assessments among central banks to determine whether future financial infrastructures will adopt blockchain-like ledger architectures, and how they will interface with commercial banks and market participants.

A CBDC can be seen as a “digital version of cash” issued by a central bank, operating within a regulatory framework to enhance payment efficiency, reduce costs, and promote financial inclusion. BIS research and pilot programs on CBDCs have a direct impact on the speed, cost, and accessibility of international remittances—factors highly relevant to global Web3 users.

Furthermore, the BIS’s vision of a “unified ledger” proposes integrating various forms of money and assets into a single programmable settlement infrastructure. This overlaps with—but also diverges from—the Web3 ethos of “on-chain native” finance.

How Does the BIS Advance CBDCs?

The BIS drives CBDC development mainly through cross-border experiments and annual surveys. It facilitates collaborative testing among central banks on technology, legal frameworks, and operational feasibility for both retail and wholesale CBDC scenarios.

According to the BIS’s 2024 CBDC Annual Survey (Source: BIS, July 2024), most central banks are conducting related research or pilots. More countries are expected to move toward actual implementations or limited rollouts at either the retail or wholesale level in the coming years. These pilots test not only technical performance but also privacy protection, compliance reviews, and impacts on financial stability.

Key projects include:

• mBridge: Led by the BIS Innovation Hub Hong Kong Centre in collaboration with several central banks, mBridge focuses on multi-CBDC cross-border payment and settlement. As of 2024, it has reached the MVP stage, exploring real-time settlement using multiple sovereign currencies.
• Dunbar: Tests a shared multi-CBDC platform to validate wholesale settlement among commercial banks from different countries within a unified environment.
• Icebreaker: Spearheaded by the Nordic Innovation Centre and multiple central banks, this project explores routes for low-value cross-border retail payments by bridging domestic systems.
• Helvetia and other pilots: Examines how wholesale CBDCs integrate with financial market infrastructures, such as securities settlement systems.

What Is the BIS Unified Ledger and How Does It Differ from Blockchain?

The unified ledger proposed by the BIS envisions integrating central bank money, commercial bank deposits, and tokenized assets into a single digital infrastructure for programmable and atomic settlement. The concept emphasizes composable finance within a controlled and compliant environment.

The key difference from blockchain lies in governance and openness. Public blockchains are open, permissionless networks where anyone can participate or validate transactions. The unified ledger resembles a “permissioned network,” with access, rules, and privacy boundaries controlled by central banks and regulated entities. This results in different trade-offs: the unified ledger prioritizes regulation and financial stability, while public blockchains prioritize openness and permissionless innovation.

In its 2023 Annual Economic Report (Source: BIS, June 2023), the BIS outlined this vision—integrating payments, identity, and asset settlement on a single platform to make cross-market “simultaneous delivery” more reliable.

What Is the BIS’s View on Stablecoins and DeFi?

BIS research generally finds that stablecoins rely on issuer credibility and reserve management, making them unsuitable as final settlement assets. Events like runs or declining reserve quality can trigger volatility and systemic risks. The BIS favors CBDCs or regulated bank money as settlement anchors.

Regarding DeFi, the BIS highlights risks such as contagion, liquidity fragmentation, and compliance challenges. Their analyses point out that cross-chain bridges, oracles, and governance tokens may introduce systemic vulnerabilities—requiring both technological enhancements and stronger regulatory oversight (Source: BIS Research & Working Papers, 2023–2024). This does not mean rejecting innovation; rather, it underscores risk identification and sustainability.

How Do BIS Policies Impact Exchanges and Users?

While the BIS does not directly regulate exchanges, its banking standards and principles for payment systems shape how banks interact with the crypto industry. If capital and risk exposure requirements (such as those established under BCBS guidelines within the BIS framework—finalized in 2022 and rolling out globally from 2025) become stricter, banks may raise costs or limit access to fiat on/off ramps and custody services for exchanges.

For users, broader adoption of CBDCs or cross-border payment pilots could change fiat deposit/withdrawal experiences. For example, if a country allows interoperability between CBDCs and commercial bank accounts during a pilot phase, you might experience faster settlements and lower fees when transferring funds to Gate via local bank transfer. However, compliance rules could also impose limits or restrict certain use cases. Actual effects depend on local central bank and banking policies.

Security reminder: Whether dealing with fiat or on-chain assets, always complete identity verification and risk checks. Avoid using untrusted third-party channels to prevent losses from phishing or fraudulent links.

How to Stay Updated on BIS Developments for Investment Decisions

Step 1: Subscribe to information sources. Follow the BIS website’s “News & Publications” and “Innovation Hub” sections; enable email alerts or RSS feeds to receive timely updates.

Step 2: Track key reports. Focus on high-value content such as annual economic reports, CBDC surveys, cross-border payment project updates, and policy briefs—always noting the date and version to avoid outdated information.

Step 3: Build an impact checklist. List factors that may affect crypto prices or liquidity—such as countries piloting CBDCs, progress in cross-border projects, or changes to banking exposure rules—and record their effective dates.

Step 4: Translate insights into strategy. If you spot signals of accelerated cross-border settlements, consider focusing on payment-related sectors or regulated stablecoin ecosystems. If banking risk rules tighten, evaluate fiat gateway costs and alternative solutions. Always align decisions with your own risk tolerance, portfolio management discipline, and stop-loss strategies.

What Are the BIS’s Cross-Border Payment Projects and Progress?

The BIS is piloting multiple projects to validate “multi-CBDC cross-border settlement” and “retail cross-border payment” technology paths. mBridge explores instant settlement of multiple sovereign currencies on a shared platform; Icebreaker tests “bridging” between different domestic systems; Dunbar validates wholesale settlement rules in multi-CBDC environments.

As of 2024, mBridge has reached the MVP stage with participation from several Asian and Middle Eastern central banks (Source: BIS Innovation Hub Hong Kong Centre, 2024). Icebreaker and Dunbar published trial results in 2023 confirming technical feasibility but highlighting the need for supporting legal and governance frameworks (Source: BIS, 2023). These developments suggest that cross-border payments could go live first in selected corridors before expanding more widely.

What Insights Arise from Comparing the BIS Approach with Blockchain?

The BIS advocates for a “permissioned, compliance-first” unified ledger approach focused on privacy protection, governance, and financial stability; public blockchains represent an “open, permissionless” arena emphasizing composability and global accessibility.

Key takeaways:

• Complementary rather than oppositional roles. Permissioned infrastructures can support sovereign currencies and large-value settlements; public blockchains can drive open innovation and cross-platform applications.
• Interfaces matter. Programmable APIs for payments, identity, and assets will determine how these systems connect—wallets, gateways, and compliance modules will play critical roles.
• Risks coexist with opportunities. As banking regulations evolve and CBDC pilots expand, ecosystems for fiat gateways and compliant stablecoins may grow—but compliance requirements and cost structures will also change.

Summary: The Intersection of BIS and Web3

By coordinating central banks and advancing pilots, the BIS is reshaping foundational rules for cross-border payments and settlements. Its unified ledger vision, CBDC initiatives, and banking risk standards will affect global capital flows, exchange-bank connectivity, stablecoin positioning, and asset tokenization. For Web3 participants, tracking BIS reports and timelines is not just about policy awareness—it’s also about anticipating infrastructure upgrades’ pace and direction. In an environment of both opportunities and constraints, staying informed from authoritative sources while prioritizing security and compliance is essential to seizing emerging trends.

FAQ

Will Digital Currencies Issued by the BIS Affect Bitcoin or Ethereum?

CBDCs promoted by the BIS operate under fundamentally different principles than Bitcoin or Ethereum. CBDCs are centrally issued and managed by central banks; Bitcoin and Ethereum are decentralized networks. They can coexist long-term, but widespread CBDC adoption may affect traditional payment traffic distribution. It is advisable to monitor each country’s CBDC policy progress to assess potential long-term impacts on crypto markets.

Why Does the BIS Engage in Crypto Asset and DeFi Discussions?

As the central bank for central banks globally, the BIS must monitor all factors affecting financial stability. The rapid growth of cryptocurrencies and DeFi may introduce systemic risks; thus it is necessary to study their mechanisms, vulnerabilities, and regulatory responses. This reflects its responsibility for risk prevention—not opposition to innovation.

What Is the Practical Impact of BIS Policy Recommendations on Exchange Users?

BIS policy recommendations gradually influence national regulatory decisions that shape exchange operating rules. For instance, recommendations concerning stablecoins or leveraged trading could lead to new business restrictions or higher compliance costs. Users should track their country’s adoption of these recommendations to anticipate possible regulatory changes.

Does the BIS Support Blockchain Technology?

The BIS takes a pragmatic stance on blockchain: acknowledging benefits such as transparency and efficiency but expressing reservations about full decentralization. In its CBDC or cross-border payment initiatives, it tends to favor controlled distributed ledgers over fully public blockchains—reflecting regulators’ need to balance innovation with risk management.

How Should Individual Investors Respond to Global Financial Changes Driven by the BIS?

Consider three approaches: first, follow CBDC developments and national rollout timelines to assess impacts on payments or store-of-value options; second, watch stablecoin/DeFi regulatory trends to adjust portfolio strategies accordingly; third, learn about innovations in cross-border payments to understand how financial infrastructure may evolve. Major platforms like Gate typically update compliance policies promptly—these can serve as reliable reference points.