The Federal Reserve Bank of New York has announced that it will partner with the Bank for International Settlements’ Innovation Center to launch the New York Innovation Center, an initiative to explore the technologies used to advance the global financial system.
On Monday, during the opening of the New York Innovation Center, Federal Reserve Chairman Jerome Powell said the partnership will support the agency’s analysis of digital currencies, including the implementation of a central bank digital currency, or CBDC. The Center plans to support analyzes aimed at improving cross-border payment systems.
“The pace of technological change and innovation over the past decade has led some to claim that we are heading toward a fourth industrial revolution – the digital revolution,” Powell said. “There is no doubt that rapid innovation, including through the use of advanced digital technologies, machine learning, artificial intelligence and big data, is revolutionizing the financial sector.”
Per von Selowitz, former director of banking transformation at PwC, will head the Innovation Center. BIS Innovation Centers located in Hong Kong, Singapore, Toronto, London, Stockholm and other countries have supported some research projects aimed at integrating digital central bank currencies into payment systems in different countries, as well as into other infrastructure used by central banks. A survey conducted by the Bank for International Settlements in January showed that 86% of major central banks are actively exploring the possibility of introducing digital currency for central banks.
On the subject: The Fed Remains Uncertain About Digital Dollars, Says Chairman Jerome Powell
Powell’s comments came in anticipation of a hearing at the Senate Banking Committee to consider his nomination for another term as Federal Reserve Chairman. In September, he said that the Fed was “actively working to issue a central bank digital currency,” but would not support a complete ban on cryptocurrencies.