swapclear in london. 18 both of these ccps come under the surveillance of the bank of canada. financing long - term investment the g - 20 is committed to creating a climate that facilitates increased long - term investment, particularly in infrastructure. 19 to achieve that goal, the g - 20 will promote private financing, the preferred - share instruments are known more formally as non - viable contingent capital. see remarks by assistant superintendent mark zelmer to the bmo “ first annual reserve management conference ”, toronto, 7 may 2013. www. osfi - bsif. gc. ca / eng / docs / mz20130507. pdf. because the use of ccps reduces counterparty risk, collateral requirements will be less than those for bilaterally cleared transactions, not only for the parties involved, but also for the system as a whole. bis central bankers ’ speeches potentially through pension funds and possibly with the use of high - quality securitization instruments. this is a positive development for canadian pension funds because they are already active in funding infrastructure globally. 20 conclusion i ’ d like to conclude by emphasizing again that we recognize the contribution that pension funds make to financial stability. we want to work with you to enhance this contribution because what makes you stronger makes the system stronger. for our part, as public authorities we need to ensure that the reforms are coherent and don ’ t conflict with existing regulations, particularly tax and solvency rules. we also need to coordinate regulations and information sharing across federal and provincial agencies. in this regard, the canadian association of pension fund regulators has made important and useful contributions, but more can be done. and we need to encourage the safe use of derivatives and other instruments, such as a repo ccp, to better manage risk. for your part, your funds must have realistic return targets and effective risk governance. our combined efforts will help to promote a stable and more resilient financial system that will better serve not only your plan sponsors and beneficiaries, but all canadians. thank you. communique, meeting of finance ministers and central bank governors, sydney, 22 – 23 february 2014. canadian - based public pension funds have an average current allocation in infrastructure investments of 5. 9 per cent and a target allocation of 8 per cent. see “ comparing infrastructure investments among u. s. and canadian public pensions – february 2014 ”, preqin. https : / / www. preqin. com / blog /

opting to further explore the viability of tokenised central bank money in financial markets. such exploration – although largely conceptual at this stage – is important given the growth in technological innovation and the use of new forms of payment instruments facilitated by the rapid pace of innovation. in our experimentation during pk2, two forms of tokenised money were created to allow for settlement. the first form of money was a tokenised form of central bank money which was a liability of the central bank issued onto a specific dlt owned and operated by the sarb in the poc. this form of money was used to purchase sarb debentures in the primary market. the second form of money was issued by commercial banks as a stablecoin and used for purchasing sarb debentures in the secondary market. in this way, pk2 explored and expanded on how settlement in central bank money and commercial bank money can happen on dlt. page 2 of 6 the debenture token market benefitted from having a riskless settlement asset in the form of a wholesale central bank digital currency ( wcbdc ) used for settlement. this reduced the settlement risk, particularly that payment might fail or might be uncertain due to riskiness in the settlement asset. the wcbdc prototype developed in pk2 was also the preferred asset in other instances. it served as the reserve asset guaranteeing the value of the wholesale stablecoin issued by commercial banks, and it was used to make payment to debenture token holders upon the maturity of the debenture. the role of the central bank in the tokenised debenture token market was therefore similar to the current role played by the central bank. our attempts to learn more about the relevant technology have been guided by a few principles that can also be referred to as ‘ the five ps of fintech policy exploration ’. purpose - driven projects from a central banking perspective, practical exploration should always be conducted with a purpose. central banks should therefore ‘ play ’ to learn and gain deeper insights into technology - based innovation and its potential impact on their mandate as well as on any relevant policy and regulatory frameworks in the financial system. i refer to the term ‘ playing ’ deliberately because our exploration with technology often happens in a controlled environment, whether it is a poc such as project khokha or whether it is a ‘ regulatory sandbox ’ in the event of live transactions on a confined basis. since dlt - based innovation is still quite nascent