In Brief:
- The Federal Reserve Bank announced a partnership with BIS to explore the global finance system.
- It launched the New York Innovation Center, which will be led by Per Von Zelowitz.
- NYIC will help central banks to improve the payment system.
The Federal Bank Reserve officials revealed a strategic partnership with the Bank for International Settlements Innovation Hub during the launch of its NY Innovation Center (NYIC). The aim of this collaboration is to analyze the development of the global financial system.
While attending New York Innovation Center inauguration, Federal Reserve Chairman Jerome Powell stated that the partnership will provide a better understanding of digital currency, including Central Bank Digital Currency (CBDC).
“The pace of technological change and innovation over the last decade has led some to argue that we are on the brink of a fourth industrial revolution — a digital revolution,” said Powell. “Certainly, rapid innovation, including through the application of advanced digital technologies, machine learning, artificial intelligence, and big data, is revolutionizing the financial sector.”
Per Von Zelowitz will lead the innovation center, who was former Pwc director of banking transformation. NYIC will join the BIS innovation hubs.
BIS innovation hubs have been supporting numerous research projects in Singapore, Toronto, London, Stockholm, and many others. These innovation projects are aiming to integrate CBDCs with other countries as well as other infrastructure used by central banks.
With the expansion of the global financial system, CBDC projects are under development in many countries. According to a recent BIS survey, more than 80% of central banks were involved in CBDC development.
Powell’s first term as a chairman of the Federal Reserve will be ending soon and U.S. president Joe Biden already nominated him for a second term to lead the federal reserve bank.
