The Bank for International Settlements as a FinTech Start Up

Since its foundation in 1930, the Bank for International Settlements (BIS) has served as q clearing house for ideas about the regulation of the international financial system. More recently, the BIS has been at the forefront of debates about how a new generation of digital technologies is transforming business models, products, processes and applications in the field of financial services. This paper asks why and how the BIS went from being a repository of research on FinTech to a developer of FinTech protypes. Examples of such work include Project Aurum, a protype designed to facilitate intermediated Central Bank Digital Currencies (CBDCs) and stablecoins backed by CBDCs, and Project Nexus, a proof-of-concept for connecting instant payment systems across borders. The BIS's emergence as a FinTech hub can be viewed as a response to central banks' ambivalent embrace of new financial technologies since the global financial crisis and the growing political influence of private FinTech interests. The Basle-based institution is well placed to solve collective action problems over FinTech, we conclude, but in ways that pose risks to financial market competition. The remainder of this paper is divided into three sections. The first part of this paper recalls the BIS's role as an incubator of ideas. The second looks at the Bank's growing interest in FinTech from 2017 and more recent efforts to develop public goods and open-tech related to financial technologies. The third section ask what the BIS's new role as a FinTech start-up might mean for innovation and competition in digital financial services.