As Skeptics Dance on Crypto’s Grave the Fed and Big Banks Launch Digital Ledger Project

Citigroup, Wells Fargo, and MasterCard Test DLT to Connect Deposits

Even as the crypto industry grapples with a year-long bear market and the collapse of FTX, global financial institutions just can’t say no to blockchain-related technology. 

On Tuesday, a lineup of top-shelf firms — Citigroup, HSBC, Wells Fargo, and MasterCard, among others — joined forces with the Federal Reserve Bank of New York to explore using distributed ledgers to connect deposits. 

Future of Infrastructure

Coming at a time when skeptics are declaring crypto dead, the project shows research and development in digital ledgers remains alive and well. The pilot program will run for 12 weeks, according to the Fed’s New York Innovation Center (NYIC), which is overseeing the project.

“The NYIC looks forward to collaborating with members of the banking community to advance research on asset tokenization and the future of financial market infrastructures in the U.S. as money and banking evolve,” said Per von Zelowitz, director of the NYIC., in a statement.

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According to the NYIC, an RLN “provides a multi-asset, always-on, programmable infrastructure containing digital representations of central bank, commercial bank, and regulated non-bank issuer liabilities, denominated in U.S. dollars.”

The project will be simulated with test data only, and the Fed said it does not mean the U.S. central bank plans to issue a “retail or wholesale CBDC, nor how one would necessarily be designed.” CBDCs are central bank digital currencies.

Project Guardian

The project comes just two weeks after the first on-chain foreign exchange swap was completed as part of Project Guardian, an initiative backed by the Monetary Authority of Singapore, the Asian city-state’s central bank.