Federal Reserve Bank Of New York Completes CBDC Trading Test
An office of the Federal Reserve Bank of New York has successfully tested a central bank digital currency (CBDC) for large-scale, international trades by exchanging a digital dollar representing the United States for test currencies on several blockchains.
By completing the transaction at an “atomic” level and beating the standard time for clearing and settling transactions, two days, the pilot eliminated the possibility that complex cross-border trades would only be partially completed.
Numerous nations currently use real-time, non-blockchain payment systems, but they frequently use a single currency. The New York Fed experimented with clearing transactions between an electronic dollar and eight test currencies that operated on different blockchains very instantly.
Although Federal Reserve Chair Jerome Powell and other board members of the U.S. central bank have made it clear that the creation of a digital dollar is not a foregone conclusion, Project Cedar: Phase One concentrated on the potential for central bank digital currencies to become viable options for significant foreign currency transactions.
Despite the experiment’s favorable results, the New York Fed article that published them made it clear that the results were not final. Nevertheless, the project’s backers praised the possibility of a central bank digital currency issued by the Americans for use in large-scale international transactions.
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