The Federal Reserve Bank of New York (NY Fed), along with several other large financial institutions, has <a href="https://www.newyorkfed.org/newsevents/news/financial-services-and-infrastructure/2022/20221115" target="_blank" rel="nofollow noopener">begun</a> testing the usage of digital tokens that symbolize digital dollars to enhance the settlement of <a href="https://www.cryptoknowmics.com/news/central-bank-of-russia-cbr-studies-role-of-crypto-in-financial-sector">central bank</a> funds between institutions.
<h2>NY Fed Introduced 12-Week Proof-of-Concept Trial</h2>
According to the announcement made by NY Fed on Tuesday, institutions participating in the testing of digital tokens use cases include Citigroup (C), HSBC (HSBC), <a href="https://www.cryptoknowmics.com/news/bny-mellon-launches-new-digital-asset-custody-platform">BNY Mellon (BK)</a>, and Wells Fargo (WFC), as well as payments behemoth <a href="https://www.cryptoknowmics.com/news/mastercard-to-assist-banks-in-providing-cryptocurrency-trading-services">Mastercard (MA)</a>. NYIC stated that it would begin a 12-week proof-of-concept trial for a <a href="https://www.cryptoknowmics.com/news/david-chaum-launches-cbdc-technology-that-preserves-privacy">central bank digital currency or CBDC</a>. The 12-week proof-of-concept pilot program will investigate the application of this platform.

In addition to simulating tokens and investigating regulatory frameworks, the proof-of-concept study will evaluate the design and development, legal viability, and business application of <a href="https://www.cryptoknowmics.com/news/ecb-investigates-distributed-ledger-technology-for-interbank-settlements">distributed ledger technology</a>.
<h2>Banks to Use Regulated Liability Network</h2>
The regulated liability network, or RLN, is a network that banks may use to produce tokens that reflect client deposits that are resolved on a central bank reserve on a shared <a href="https://www.cryptoknowmics.com/news/ecb-investigates-distributed-ledger-technology-for-interbank-settlements">distributed ledger</a>. NYIC Director Per von Zelowitz stated that the NYIC looks forward to partnering with representatives of the banking sector to further study asset tokenization and the development of financial market systems in the U.S. as finance and banking transform.

NY Fed Begins Testing Digital Tokens for Wholesale Transactions

NY Fed along with several other large financial institutions, has begun testing the usage of digital tokens that symbolize digital dollars.

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NY Fed Begins Testing Digital Tokens for Wholesale Transactions

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