HomeCryptoPartnership between Fed and BIS Innovation Lab on digital asset projects

Partnership between Fed and BIS Innovation Lab on digital asset projects

The Federal Reserve Bank of New York has announced a partnership with the Innovation Lab at the Bank for International Settlements to study digital asset projects as part of the New York Innovation Center (NYIC).

Fed studies digital assets

Federal Reserve Chairman Jerome Powell, who was recently confirmed in the role by President Biden, commented on the news by saying:

“The pace of technological change and innovation over the last decade has led some to argue that we are on the brink of a fourth industrial revolution — a digital revolution”.

During the press conference held to announce the partnership, Powell also said the partnership will support the agency’s analysis of digital currencies, including the launch of a Central Bank Digital Currency, (CBDC).  The centre is also expected to support analysis aimed at improving cross-border payment systems.

Agustin Carstens, director general of BIS, said that the NYIC:

“is not a think tank, it’s a laboratory” intended to produce solutions. The strategic partnership will let the BIS Innovation Hub benefit from the Federal Reserve’s expertise in innovation, and allow us to contribute our own global perspective to the work of the New York Innovation Center”.

Jerome Powell
Jerome Powell

NYIC’s areas of study

The NYIC will focus on five major macro-areas:

  • supervisory and regulatory technology,
  • financial market infrastructure
  • financial cyberattacks,
  • open finance and climate change risks.

Moving towards a CBDC

Among the projects to be pursued by the new partnership, the prospect of creating a new CBDC will certainly have a significant part to play, as Powell expressly said:

“In particular, the partnership will support our analysis of digital currencies, including central bank digital currencies”.

Per Von Zelowitz, former head of banking transformation at PwC, will lead the Fed’s new Innovation Center.

This is news that could be an important step for the Fed, which has always been very critical of cryptocurrencies, arguing that they need to be more regulated.

In August, Jerome Powell had claimed that the Fed was not yet thinking about creating a state digital currency, considering it still premature, despite the fact that according to a recent report by the Encounter, around 80% of the world’s central banks are already working on CDBC projects.

On the other hand, in September, the president of the BIS Innovation Lab, Benoît Cœuré, called on all central banks to create their own digital state currencies, so as not to leave too much room for the private cryptocurrency market.

The Innovation Lab itself already supports study projects for the creation of digital state currencies, such as the one launched in September with the central banks of Hong Kong, China, the United Arab Emirates and Thailand.

 

Vincenzo Cacioppoli
Vincenzo Cacioppoli
Vincenzo was born in Genova but lived most of his life in Milan. He has a degree in political science. He is a journalist, blogger, writer, and marketing and digital advertising expert. After a long experience in traditional marketing, he started working with the web and digital advertising in 2011, creating a company called Le enfants. Passionate about the web and innovation, in 2018 he started exploring the topics related to blockchain technology and cryptocurrencies. Independent cryptocurrency trader since March 2018, he now collaborates with companies in the sector as a content marketing specialist. In his blog. mediateccando.blogspot.com, he has long been primarily focused on blockchain, which he considers to be the greatest technological innovation after the Internet. His first book about blockchain and fintech is scheduled for release in November.
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