The Federal Reserve Bank of New York announced that it will partner with the Bank for International Settlements (BIP) Innovation Center as part of the launch of its New York Innovation Center, an initiative to explore technology. used to develop the global financial system.
In a speech delivered Monday at the inauguration of the New York Center for Innovation, the Chairman of the Federal Reserve, Jerome Powell said the association would support the body’s analysis of digital currencies, including the launch of a central bank digital currency, or CBDC for short. The center plans to support analyzes aimed at improving cross-border payment systems.
“The pace of technological change and innovation in the last decade has led some to argue that we are on the brink of a fourth industrial revolution: a digital revolution,” Powell said. “Certainly, rapid innovation, including through the application of advanced digital technologies, machine learning, artificial intelligence and big data, is revolutionizing the financial industry.”
Per von Zelowitz, former head of banking transformation at PwC, will run the innovation center. Headquartered in Hong Kong, Singapore, Toronto, London and Stockholm, among others, the BIS innovation centers have supported some research projects aimed at integrating CBDCs into payment systems in different countries, as well as other infrastructures used by central banks. A BIS survey conducted in January showed that 86% of major central banks were actively considering implementing a CBDC.
Powell’s comments came while awaiting a Senate Banking Committee hearing to consider his nomination for a second term as Fed chairman. In September he said the Fed was “working proactively to issue a CBDC” but that it was unlikely to support a blanket ban on cryptocurrencies like the one seen in China.