The conundrum surrounding cryptocurrency is growing, and the use of “Central Bank Digital Currency” (CBDC) is spreading to more countries.
To that end, New York has now been added to the list of well-known states that have launched CBDCs.
The Federal Reserve Bank of New York’s Innovation Center, also known as NYIC, announced the launch of a 12-week proof-of-concept (PoC) project for a CBDC.
The regulated liability network pilot program will investigate the potential of an interoperable digital currency system (RLN).
The New York Innovation Center’s Director, Per von Zelowitz, stated that 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 United States as money and banking evolve.
The New York Innovation Center launched a pilot experiment following the publication of research on its wholesale central bank digital currency program.
The proposed framework would use distributed ledger technology to support advancements in financial settlements.
It would also allow central banks, commercial banks of various sizes, and regulated non-banks to participate.
According to the statement, banking firms such as Citigroup Inc, HSBC Holdings Plc (HSBA.L), Mastercard Inc, Wells Fargo & Co (WFC.N), and PNC Bank are participating in the trial with the New York Fed’s innovation center.
Furthermore, the Hong Kong government announced last month the establishment of an official framework for the Digital Hong Kong Dollar.