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Policymakers in the global banking sector are planning projects to explore innovations such as digital currencies and cutting-edge payments systems.

The Bank for International Settlements said its various innovation hubs will launch new initiatives involving central bank digital currencies (CBDCs), next generation payments systems and decentralised finance (DeFi) in the coming year.

For example, the BIS’s new hub in London will look at how both retail customers and businesses can benefit from CBDCs.

“One project will enable the development of innovative payment solutions that can be settled quickly and cheaply with central bank money. And a second will develop a platform supporting applications that individuals and businesses can use to store, transfer and pay with retail CBDCs,” the bank said in a release.

Similarly, its new Stockholm office will examine how payments data could be used to detect illegal activities, such as money laundering and tax evasion.

A new project in Hong Kong will look at using DeFi technologies (such as blockchain, tokenization and smart contracts) to improve financing for small businesses.

And, the innovation unit in Singapore aims to build a platform to enable regulators to use artificial intelligence and machine learning to analyze data, including climate-related risk and sustainability metrics.

The BIS will also be expanding its innovation hub this year, with a new office in Toronto due to open.

“With an expanded network of hub centres and exciting new projects, the BIS Innovation Hub is now in a stronger position to innovate in a sound, sustainable way, harnessing the benefits of digital technology, serving the public interest, and working cooperatively with the central bank community, academia and the private sector,” said Agustín Carstens, BIS general manager.