Are banking giants launching a digital dollar pilot?

Banking Giants and New York Fed Start 12-Week Digital Dollar Pilot FILE PHOTO: People walk wearing masks outside The Federal Reserve Bank of New York in New York City, U.S., March 18, 2020. REUTERS/Lucas Jackson/File Photo Reuters

Could a digital dollar be based on distributed ledger technology?

Several U.S. financial institutions are collaborating to test the feasibility of a digital dollar based on distributed ledger technology. Participants include BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, TD Bank, Truist, U.S. Bank, and Wells Fargo. The New York Innovation Center, part of the New York Fed, is also involved.

Can a digital dollar improve financial settlements?

The New York Innovation Center, part of the New York Fed, is also involved. The pilot will run for 12 weeks in a test environment and will involve central banks, commercial banks, and regulated non-banks. The project is the most significant step to date in creating a digital dollar to improve financial settlements.

Is a digital dollar the future of monetary policy?

Coming back, proponents argue that a digital U.S. dollar will allow the Federal Reserve a much greater level of precision in enacting its own monetary policy.