Project Promissa, a new collaboration announced between the BIS Innovation Hub Swiss Centre, the Swiss National Bank, and the World Bank, is spearheading an experiment to revolutionise the way financial instruments, particularly promissory notes, are managed. These notes, traditionally paper-based, are crucial in funding international financial institutions, including multilateral development banks. As part of a broader G20 initiative to enhance the efficiency and capacity of these banks, the project aims to digitise these instruments.
Promissory notes, used by member nations to fulfill financial commitments to organisations like the World Bank, currently operate within a paper-based system. This traditional method, while providing necessary operational controls, faces several challenges in terms of efficiency and management. Project Promissa intends to address these issues by creating a digital platform for “tokenized” promissory notes, employing distributed ledger technology (DLT). This technology is expected to streamline management and provide a unified, transparent view of the notes for all involved parties, including the government of a member nation and its central bank, as well as various international financial institutions.
The primary objective of Project Promissa is to develop and test a proof of concept (PoC) for this digital platform by early 2025. Looking ahead, the project has the potential to expand beyond simplifying note management. It could eventually integrate tokenized payment systems for the encashment of these notes, utilising either private or public money. This expansion would further streamline financial transactions between member nations and international financial institutions.
