Earlier this week, the Bank of International Settlements (BIS), referred to as ‘the central bank of central banks;’ whose mission is “to support central banks’ pursuit of monetary and financial stability through international cooperation, and to act as a bank for central banks,” announced that it has selected a new General Manager to take over the reigns beginning July 1st, 2025.
According to the BIS press release published on November 11th, the Board of Directors of BIS appointed Pablo Hernández de Cos as its next General Manager and to serve as the institution’s head for the next five years. De Cos was previously Governor of the Bank of Spain from 2018 until June 2024.
He will be taking over for current General Manager Agustín Carstens. During his reign, Carsten oversaw the launch of the network of BIS Innovation Hubs around the world. He is a big proponent of the Unified Ledger, tokenization and the Finternet.
On October 19th, 2020, BIS General Manager Agustin Carstens openly admitted that CBDCs would grant central banks total control over the populace, acknowledging that central banks would know precisely how much money people have in their accounts at any given moment.
We don’t know who’s using a $100 bill today and we don’t know who’s using a 1,000 peso bill today. The key difference with the CBDC is the central bank will have absolute control on the rules and regulations that will determine the use of that expression of central bank liability, and also we will have the technology to enforce that.
Carstens said
François Villeroy de Galhau, who was re-elected as the Chair of the BIS, said in a statement:
“The Board of Directors is delighted to announce the appointment of Pablo Hernández de Cos as the next General Manager of the BIS. It was essential for the Board to find an excellent leader to succeed Mr Carstens, who has been extremely successful in leading and transforming the BIS in these challenging times. Mr Hernández de Cos is a person of remarkable calibre and global experience, and we are fully confident that he will embody the spirit of international trust and technical excellence on which the BIS is built. The Board looks forward very much to working closely with him when he assumes his new role in July 2025.”
Like Carstens, Ledger Insights notes that de Cos has a track record of being friendly to things such as tokenization. His appointment may signal the Bank’s increased research and development of tokenization. The outlet wrote:
On the basis of desktop research, we uncovered two strong indicators, one in favor and one more reserved. At the Bank of Spain he was keen to support tokenization initiatives, but he also chaired the Basel Committee on Banking Supervision with its risk management emphasis.
Before the European Central Bank (ECB) formulated its wholesale DLT settlement trials, the Bank of Spain decided to conduct some of its own research. It commissioned multiple projects, including the creation of a wholesale CBDC platform to support tokenized deposits and securities settlement. Also, during his Bank of Spain tenure, the private sector led by Iberpay explored smart contract driven payments as early as 2019, and digital euro preparation more recently.
Mr de Cos chaired the Basel Committee on Banking Supervision from 2019 through to June 2024. It’s responsible for formulating rules for how banks engage with crypto. The downside of his involvement as Chair, is it emphasis on the management of risks rather than opportunities. During his tenure, there was a mixed bag of outcomes, although it is a committee, so he was not the sole arbiter.
Basel discouraged banks from having direct exposure to cryptocurrencies, with the aim of protecting regular account holder from crypto volatility and bank mis-steps. On the other hand, it did not discourage banks from providing cryptocurrency custody, unlike the US SEC. The Basel Committee had planned to add a small risk weighting to tokenized securities, but dropped the idea before announcing the final version of the Basel crypto rules.
However, in early July this year, days after Mr de Cos’ departure, the Committee approved rules which make it prohibitive for banks to underwrite digital securities issuances on public blockchains. The position was formulated while Mr de Cos was the Chair. On the other hand, while banks have shown interest in public blockchains, they’ve been cautious because regulators are less keen.
What’s clear is that Mr de Cos is likely to be well informed about the ins and outs of both crypto and tokenization. Only time will tell how this influences the future direction of the BIS.
AUTHOR COMMENTARY
The WinePress published a very detailed and lengthy report on tokenization, what it is, its development by the likes of BIS, BlackRock, the IMF, the World Bank, and a plethora of other entities and central banks. That report will probably have to be updated soon anyway because of the sheer number of developments that continue to come out.
Tokenization procurement and development by the BIS will absolutely continue and will definitely shift into a higher gear in 2025 and the years to follow…
[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).
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