The Swiss National Bank, together with the Bank for International Settlements (BIS) Innovation Hub and the World Bank, has successfully developed a proof-of-concept (PoC) platform aimed at improving the management of financial commitments in Multilateral Development Banks (MDBs).
The project explored the potential of tokenised promissory notes, using distributed ledger technology (DLT) to replace traditional paper-based notes, automate manual processes, and reduce costs.
For decades, MDBs such as the World Bank have used promissory notes to track and encash multi-year financial commitments from member countries.
However, the process has been time-consuming, cumbersome, and often requires constant reconciliation.
Project Promissa sought to address these operational challenges by leveraging blockchain technology to streamline the lifecycle of promissory notes, from issuance to payment and archiving.
A promissory note is a financial instrument that contains a written and signed commitment by one party to pay a specified sum to another over a set period.
The volume of promissory notes across MDBs represents a significant portion of contributions pledged by member countries.
By digitising the process, the platform developed in Project Promissa has the potential to reduce administrative costs and improve efficiency across the system.
Morten Bech, Head of the BIS Innovation Hub’s Swiss Centre, commented:
“Project Promissa is a clear example of how blockchain can be used for the public good. Paper-based promissory notes have been in place since the Bretton Woods institutions were established, helping finance their important activities worldwide. The digital solutions tested by Promissa represent a significant step forward in cost-effectively modernising these processes.”
Jorge Familiar, Vice President and Treasurer of the World Bank, added:
“Project Promissa is a forward-looking initiative that contributes to the G20’s vision of better, and more effective, multilateral development banks. The World Bank is proud to collaborate with the BIS Innovation Hub and the Swiss National Bank in shaping practical solutions that support transparency, trust, and scale in development finance.”
The DLT-based platform ensures that participants have a single source of truth, enables multiparty signatures, and maintains confidentiality while allowing each party to retain control over their respective promissory notes.
Seven countries participated in testing the PoC and provided valuable feedback for further improvement, with the International Monetary Fund observing the process.
The results, published in the final report, confirm that the platform is technically feasible and can be tailored to meet various requirements. However, further development is needed to make the platform fully operational.
Featured image credit: edited from freepik
