LONDON (Reuters) - Three of the world's cornerstone institutions - the International Monetary Fund, the World Bank and the Bank for International Settlements - are to work together for the first time to "tokenise" some of the financial instruments that underpin their global work, a BIS official said on Tuesday.
The trio will also work with Switzerland's central bank which has been pioneering tokenisation, the process of turning conventional assets into uniquely coded "tokens" that can be used in faster new systems.
Their collaboration will initially focus on simple but still paper-based processes such as when richer countries donate into some of the World Bank's funds to support poorer parts of the world.
That original pledge can be in the form of what is known as "promissory note." It is that note that could be tokenised, making it easier to transfer when required.
"We will work together ... to simplify the process for making development money available for emerging and developing economies," BIS official Cecilia Skingsley said at conference hosted by the Atlantic Council think tank in Washington.
She added that tokenisation also opens up the possibility of "encoding policy and regulatory requirements" into a "common protocol" for tackling problems such as international money laundering.
She also touched on the new breed of central bank digital currencies (CBDCs), repeating calls for some global rules and technology standards so they can work across the world and with existing payment systems.
"Questions remain," Skingsley said. "Do these standards need to be implemented early on or else they would be difficult to change later? To what extent do they need to be adapted to ensure they can operate with non-CBDC systems?