New York Federal Reserve and Bank Working Group Finish Programmable Dollar-Based Wholesale CBDC Test
The New York Federal Reserve and other banks and payment firms have completed a 12-week proof-of-concept test of the Regulated Liability Network (RLN), a system that uses shared ledger technology to provide programmability to regulated money.
Key Points:
- The working group examined the performance of a dollar-based wholesale central bank digital currency (CBDC) in various use cases.
- The Federal Reserve New York Innovation Center’s role was limited to the simulated operation of tokenized central bank deposits as a settlement asset.
- The test found that the dollar-based CBDC could successfully operate as a payment system on a new technology platform.
- Using the CBDC for offshore settlements could improve cross-border payments and introduce parallel processing of payment proposals.
- The proposed system would provide high availability and interoperability of liquidity stored in the form of CBDC.
Hot Take: The completion of the programmable dollar-based wholesale CBDC test showcases the potential for digital currencies to revolutionize global payments and trade. The adoption of this system could enhance the efficiency of dollar transactions and improve cross-border settlements. The high availability and interoperability of the CBDC would benefit banking entities worldwide. It is a significant step towards a more interconnected and efficient global financial system.
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