I became your enemy because I tell you the truth
“The NYIC looks forward to collaborating with members of the banking community to advance research on asset tokenization and the future of financial market infrastructures in the U.S. as money and banking evolve.”
A United States central bank digital currency (CBDC) is coming even closer to fruition, as the New York Federal Reserve announced yesterday that they will be partnering with some of the largest megabanks in the country to perform a trial run of these new CBDCs.
The WinePress reported last month that the Federal Reserve had also partnered with six other megabanks – Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo – to trial a carbon-based social credit score system; a pilot program that will launch in early 2023.
One Australian megabank has already integrated a carbon-based social credit score program and climate incentives into their services: “Jamaica became the 1st country to make the digital currency of the central bank legal tender”
The following is a press release from the Federal Reserve Bank of New York:
The Federal Reserve Bank of New York today announced that its New York Innovation Center (NYIC) will participate in a proof-of-concept project to explore the feasibility of an interoperable network of central bank wholesale digital money and commercial bank digital money operating on a shared multi-entity distributed ledger.
This U.S. proof-of-concept project is experimenting with the concept of a regulated liability network. It will test the technical feasibility, legal viability, and business applicability of distributed ledger technology to settle the liabilities of regulated financial institutions through the transfer of central bank liabilities.
The NYIC looks forward to collaborating with members of the banking community to advance research on asset tokenization and the future of financial market infrastructures in the U.S. as money and banking evolve.
Per von Zelowitz, Director of the New York Innovation Center, said
As part of this 12-week project, the NYIC will collaborate with a group of private sector organizations to provide a public contribution to the body of knowledge on the application of new technology to the regulated financial system.
This project will be conducted in a test environment and only use simulated data. It is not intended to advance any specific policy outcome, nor is it intended to signal that the Federal Reserve will make any imminent decisions about the appropriateness of issuing a retail or wholesale CBDC, nor how one would necessarily be designed. The findings of the pilot project will be released after it concludes.
SEE: Jamaica became the 1st country to make the digital currency of the central bank legal tender
The NY Feds provided a separate link that provides further details into what their proof-of-concept (PoC) will entail:
Members of the U.S. banking and payments community involved in this PoC (as listed further below) are pleased to be working alongside the New York Innovation Center (NYIC) that is part of the Federal Reserve Bank of New York. The NYIC collaborates with the private and public sectors on innovations aimed at enhancing the functioning of the global financial system and the ability of central banks to carry out their missions.
Other key aspects of the PoC include:
- Regulatory framework: The platform will align with the existing regulatory framework and preserve existing requirements for deposit-based payments processing, notably maintaining know your customer and anti-money laundering requirements.
- Scope: The PoC will simulate digital money issued by regulated institutions in U.S. dollars, although the concept could potentially be extended to multi-currency operations and regulated stablecoins.
- Tokens: The PoC will simulate tokens that are 100% fungible and redeemable with other forms of money.
- Industry collaboration: The PoC will include dialogue with the broader U.S. banking community, including community and regional banks.
- Results: Following the conclusion of the PoC, the banking group will publicize the results, which they hope will be an important contribution to the literature on digital money.
- Future plans: The banking group participants are not committed to any future phases of work once the PoC has been completed.
This project will be conducted in a test environment and only use simulated data. It is not intended to advance any specific policy outcome, nor is it intended to signal that the Federal Reserve will make any imminent decisions about the appropriateness of issuing a retail or wholesale CBDC, nor how one would necessarily be designed. The findings of the pilot project will be released after it concludes.
In addition to the NYIC, the other participants on this project include the following financial institutions and payments organizations: BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, TD Bank, Truist, U.S. Bank and Wells Fargo. The technology is being provided by SETL with Digital Asset, powered by Amazon Web Services. Swift, the global financial messaging service provider, is also participating in the initiative to support interoperability across the international financial ecosystem. Legal services are being provided by Sullivan & Cromwell LLP and Deloitte will be providing advisory services.
https://winepressnews.com/2022/11/16/federal-reserve-launches-12-week-cbdc-pilot-program-with-major-banks/
Michael Loyman