Wall Street Tests Crypto Dollars with Fed, Defying FTX Gloom

Source: American Banker

A Federal Reserve Bank of New York unit will partner with almost a dozen banks and other financial institutions to test out digital dollars, a sign that Wall Street intends to push ahead with its cryptocurrency agenda despite recent upheaval in the market.

Banks including Citigroup and Wells Fargo will work with the Fed's New York Innovation Center on a new network as part of the 12-week test. The technology — known as a regulated liability network — will allow banks to simulate issuing digital money representing their customers' own funds before settling through central bank reserves on a distributed ledger.

The new system could solve problems including the movement of cash across borders, a sometimes lengthy and cumbersome process because of the myriad systems used by banks and governments around the world.