Financial Data Streaming Prototype for Handling 2,000 Data Points Per Second Now Being Developed by Bank for International Settlements

The Bank for International Settlements (BIS), a global financial institution that’s owned by reserve banks and aims to “foster international monetary and financial cooperation and serves as a bank for central banks,” is reportedly developing a data-streaming prototype that will be able to handle 2,000 different data points every second.

Referred to as “Project Rio,” the new framework is being created across the network of innovation hubs formed by the BIS in major financial locations during 2020.

A multidisciplinary team of professionals, which includes experienced technologists and economists, are currently working on this system. The platform will use the latest data-streaming tech (first developed and intended for social media networks) to analyze and effectively respond to user-generated traffic.

Agustin Carstens, General Manager at BIS, stated:

“We are building on open-source code to develop a monitoring tool for central banks. A tool that will pull millions of messages from multiple trading venues but can also scale to higher speeds. We plan to test it in volatile markets requiring seven million updates an hour – that is almost 2,000 every second. This is what it will take to alert central banks to market dislocations, liquidity issues and volatility in real time.”

Carstens revealed that BIS has consulted or held discussions with 40 reserve banks regarding the initiative and that a prototype should be ready in the foreseeable future.

The development and deployment of new tools requires new skills and teams to be formed, Carstens added. The team working on the Rio prototype includes a research economist, an FX quant, a data scientist, a software engineer, and a general analyst. Economists working at the BIS are reportedly consulting with legal experts, anthropologists, geographers and computer scientists so that they can conduct further research on the digitization of key processes.

Carstens further noted:

“This cross-collaboration in multi-disciplinary teams will be the new normal for working in central banks. By broadening our perspective through a multi-disciplinary team the effects of novel technologies can be better understood.” 

For instance, BIS research on the technology of retail central bank digital currencies (CBDC) aims to bring together industry experience in computer science, economics, and central banking, Carstens confirmed. He also mentioned that in this particular case, “the result was a framework for the design of fiat digital currency, the CBDC Pyramid.” He pointed out that by “understanding the importance of different technologies, central bankers can start to assess the trade-offs involved in different design choices.”

He continued:

“These collaborations will be even easier in the future as remote working allows more flexibility in how teams and workplaces can be structured. At the Innovation Hub, working together across borders is routine, using the new video technologies but also with collaboration platforms and Cloud-based systems.”

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