New York Fed and BIS Release Research Report Testing Tokenized Currency Policy Tool

May 16th. The Federal Reserve Bank of New York collaborated with the Bank for International Settlements (BIS) to jointly release a research report named "Project Pine," which aims to test the feasibility of implementing monetary policy using smart contracts in the tokenized financial market. The Project Pine research report indicates that the New York Fed Innovation Center and the BIS Innovation Hub jointly developed a prototype of a smart contract-based central bank monetary policy implementation toolkit. This toolkit is capable of supporting operations such as interest rate payments, asset purchases, and collateral management. It has been tested across 10 historical simulation scenarios, including those of market turmoil and liquidity crunch situations. The report highlights that smart contracts possess the ability to quickly deploy and adjust monetary policy tools, thereby providing flexibility and efficiency for future central bank policy execution in a tokenized financial system. At the same time, it also emphasizes the need to pay attention to issues such as interoperability, data standards, and potential operational risks.