Fed and MAC work together on CBDC
2022.11.17 10:47
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Fed and MAC work together on CBDC
Budrigannews.com – The Fed of New York’s, New York Innovation Center (NYCH) and the Singapore Monetary Authority (MAS) will begin a joint experiment with the central bank’s Wholesale Digital Currency (WCBDC). Regulators are interested in testing the potential of WCBDC in cross-border wholesale payments.
In May. On May 11, MAS announced the launch of the Cedar Phase II X Ubin+ project. Within this framework, NYC and MAS will use WCBDC as a settlement asset for cross-border transactions between currencies. The goal is to assess wCBDC’s possible ability to reduce liquidation risk.
Leong Sing Chiong, Deputy Managing Director of MAS, highlighted the concept of “interoperability” at the core of the experiment:
“This project is a practical way to ensure that future wholesale CBDCs are interoperable between networks while maintaining the autonomy of each network.”
As the statement goes on, the Cedar Phase II X Ubin+ project will also progress on certain policy outcomes, including the Federal Reserve’s decision to issue a Central Bank Digital currency (CBDC).
In May. 4/12 NYCH released a report on the first phase of the Cedar project. In the first phase, spot transactions are executed between different currencies on different ledgers, via an approved blockchain network with an unused transaction data output model.
Related: Clearinghouse defends the rights of banks and opposes CBDC’s comments to the US Treasury.
The Cedar project complements the Boston Federal Reserve’s work on retail CBDC for the Hamilton project, which is being implemented in conjunction with the Massachusetts Institute of Technology’s Digital Currency Initiative. Ubin+ aims to improve the efficiency of cross-border currency payments and reduce risk by promoting cross-border connectivity and interoperability of wholesale digital currencies.
Michelle Neal, Vice president and head of markets at the New York Federal Reserve, said in a speech in Singapore that the Fed does not yet plan to issue a Cbdc, but from the Fed’s point of view, “We are studying physical commodities.”
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