Innovation hubs are not just for the private sector anymore.
The June announcement by tech juggernaut Facebook that it plans to launch its own global cryptocurrency–Libra–for its 2.3 billion users was a stark reminder to central banks that disruption is coming, like it or not.
No surprise, then, that the Bank for International Settlements (BIS), a central bank umbrella group, approved plans to launch a new fintech innovation hub. Based in Basel, Hong Kong and Singapore, the hub will seek insights into trends impacting central banking, and act as a focal point for innovating and networking among banks.
“The IT revolution knows no borders and therefore has repercussions in multiple locations simultaneously,” said Jens Weidmann, chair of the BIS board of directors, in a statement. The hub “will enable central banks to extend their existing collaboration to identify relevant trends in technology.”
Libra wasn’t mentioned, but the stir it has already created has no doubt focused minds. BIS has previously called on politicians to regulate big tech firms for the new risks they may pose to the global financial system. Meanwhile, BIS general manager Augustín Carstens told the Financial Times in a June 2019 interview that many central banks are already working on their own digitized currencies, noting, “It might be that it is sooner than we think.”