Tuesday, July 21, 2020

BIS Innovation Hubs to Expand in Europe and North America

We have reported on central bank efforts to study innovations such as central bank digital currencies for some time. We have noted that movement by central banks tends to be very gradual and that most are very reluctant to make major changes very quickly. 

This trend continues, but we do see more efforts by central bank friendly organizations such as the OMFIF and the Bank for International Settlements to try and spur some innovation in fintech. Below are some excerpts from a recent new BIS announcement that it will open new innovation hubs in Europe and North America. I added underline below for added emphasis.


"The Board of the Bank for International Settlements (BIS) today announced the expansion of the BIS Innovation Hub with the establishment of new Hub centres across Europe and in North America in cooperation with member central banks.

In the next two years, the BIS will open centres in collaboration with the Bank of Canada (Toronto), the Bank of England (London), the European Central Bank/Eurosystem (Frankfurt and Paris) and four Nordic central banks (Danmarks Nationalbank, the Central Bank of Iceland, the Central Bank of Norway and Sveriges Riksbank) in Stockholm. The BIS will also form a strategic partnership with the Federal Reserve System (New York)."

Statement From BIS General Manager Agustin Carstens:

"The BIS Innovation Hub is an investment in the future of central banking and the financial system. These new centres will expand our reach significantly and help create a global force for fintech innovation."

Click here to find the press release

Added note: The BIS also releases its 2020 Annual Report which you can find here. The report this year recaps the massive central bank efforts around the world to respond to the economic slow down caused by the COVID-19 pandemic. The question going forward is what will be the longer term impact of the massive liquidity injections on systemic stability. This topic will be hotly debated in the coming months and years.

Meanwhile ---

Unrelated news note: This news came out yesterday on King World News which covers the precious metals markets. Eric Sprott, a well known as a major precious metals investor, has apparently filed notice that he intends to acquire $1.5 Billion worth of physical silver. If so, this comes when there is already a tight market for actual physical silver. It is unlikely that he could source this much silver very quickly even if he is willing to pay somewhat higher prices for it. Mr. Sprott did mention his intention to acquire physical silver in one of his recent weekly podcasts, but did not indicate the amount. This filing will probably allow him to buy the silver over time and may put a demand floor under the silver market until he completes this purchase, assuming he raises the full $1.5 Billion. This agreement I found dated back in 2018 which sounds similar covered a 25 month time frame. So, this is a market you should keep an eye on to see if his physical silver buying increases demand enough to move the silver price higher in the weeks and months ahead. Update: Here is the new filing which confirms the time period will cover the next 25 months as was the case with the previous filing. This appears to be a time extension from the prior filing allowing the trust to buy up to $1.5 Billion in physical silver over that time frame.

No comments:

Post a Comment