Crypto news in the blockchain sphere, this time kicking off with BNY Mellon and other financial giants, including Big Banks and the New York Fed, who recognize the merit of digital ledgers for global payments.
Specifically, the New York Federal Reserve’s innovation center has partnered with Citi, HSBC and other banking institutions to explore a shared ledger-based wholesale payments network, noting numerous potential benefits in this idea.
See below for full details.
Summary
The considerations of BNY Mellon and others regarding digital ledgers
As anticipated, Citigroup Inc., HSBC, BNY Mellon and other major global financial institutions have been testing a “regulated accountability network” for 24-hour wholesale payments using shared ledgers.
Notably, a paper released Thursday indicates that this system has significant potential.
Positioning itself in the midst of the debate between central bank digital currencies (CBDC) and private stablecoins, the Federal Reserve Bank of the New York Innovation Center (NYIC), which has collaborated on the project since last year, concluded that this network could improve wholesale payment processing.
Specifically, through its ability to synchronize payments denominated in US dollars and facilitate near real-time, 24/7 settlement.
Per von Zelowitz, director of the NYIC, had the following to say about this:
“From a central bank perspective, the proof of concept demonstrated interest in exploring tokenized regulated deposits and understanding the potential functional benefits of central bank digital currencies and commercial banks operating on a shared ledger.”
However, the Center pointed out that it is not endorsing the approach and that its work does not reflect an official position of the Federal Reserve.
In the context of the theoretical payment network, transactions were carried out using commercial bank deposit tokens and it was assumed that wholesale central bank digital currency would be used on the same platform, using a shared ledger.
Some comments about the initiative: “dynamic, secure, efficient”
We also see that the wholesale movement of US dollars across borders has also been examined. The network has reduced some of the hurdles related to “speed, cost, out-of-hours availability and settlement process” for payments, as shown in the proof of concept presented by the group on Thursday.
Participants in the experiment, including Mastercard, PNC Bank, Swift, TD Bank, Truist, US Bank and Wells Fargo, reportedly took no further action after the experiment.
Raj Dhamodharan, executive vice president of Mastercard, shared a tweet defining the initiative as follows:
Meanwhile, the Federal Reserve is preparing to launch its long-awaited real-time payments system, FedNow, in the United States.
This system specifically aims to allow customers’ banking transactions to be cleared immediately, rather than taking a period of several days.
Fireblocks increases its efforts in crypto by also including BNY Mellon
Recently, Fireblocks, a crypto custody technology provider, announced that it is offering support for hardware security models (HSMs) and cloud service providers such as Amazon Web Services (AWS), Google Cloud Platform, Alibaba Cloud, Thales, and Securosys.
These new additions aim to expand the accessibility of Fireblocks’ services to a wide range of enterprises, enabling them to serve both the banking market with local IT infrastructure and cloud-based solutions, according to a company spokesperson.
With these additions, the Fireblocks enterprise platform covers most of the cloud market. To date, Fireblocks has worked with more than 50 major financial institutions, including names such as BNY Mellon, BNP Paribas, and ANZ Bank, providing infrastructure support in the digital asset sector.
Clients also include fintech companies such as Revolut and Moonpay. Since December, Fireblocks has achieved the Cryptocurrency Security Standard (CCSS) certification, an important certification in the industry created as a security standard for cryptocurrency wallets and custody.
