The Federal Reserve Bank of New York has announced that, in collaboration with commercial banks, it will launch a 12-week pilot project for a central bank digital currency (CBDC).

The Federal Reserve Bank of New York also announced that its New York Innovation Center (NYIC) will participate in a pilot project to study the possibility of interoperability between the network of wholesale digital money of the central bank and the digital money of commercial banks.

According to NYIC Director Per von Zelowitz: NYIC looks forward to working with members of the banking community to advance research in the field of asset tokenization and the future of financial market infrastructure in the United States as money and banking develop.

According to the joint announcement, the members of the banking community who will participate in the CBDC pilot project of the Federal Reserve Bank of New York are Citi, HSBC, TD Bank, Wells Fargo, BNY Mellon, US Bank, Mastercard, PNC Bank, and Truist. This technology will be provided by SETL with Digital Asset based on Amazon Web Services, and global financial messaging service provider Swift will also participate to support interaction in the international financial ecosystem.

This pilot project follows the announcement of the launch of Phase II of the Cedar Project, a study by the Federal Reserve Bank of New York, a Fed study exploring the technical basis for a "theoretical wholesale central bank digital currency (wCBDC) that verifies the feasibility of cross-border settlements between international banks using various national currencies.

The Federal Reserve Bank of New York and the participating banks, after completing the pilot project, will publish the results in mid-February as a contribution to the literature on digital money.