Financial titans start 12-week digital dollar pilot with New York Fed

A raft of the biggest players in the financials space said Tuesday that they're starting a 12-week digital dollar pilot along with the Federal Reserve Bank of New York's innovation center. Among some of the participants in the project include BNY Mellon ( NYSE: BK ), Citi ( NYSE: C ), HSBC ( NYSE: HSBC ), Mastercard ( NYSE: MA ), PNC Bank ( NYSE: PNC ), TD Bank ( NYSE: TD ), Truist ( NYSE: TFC ) and Wells Fargo ( NYSE: WFC ). The so-called proof-of-concept experiment is set to explore the feasibility of an interoperable money platform, known as the regulated liability network, to see if financial settlements can improve and gain more speed. Overall, the pilot, using distributed ledger technology, will test how lenders using simulated digital tokens settle through simulated central bank reserves on a shared database. Finding of the pilot will be released after it concludes, the participants said. The move comes as many central banks explore the risks and benefits of creating a central bank digital currency, a digital representation of fiat currency issued by a central bank. India's central bank , for instance, said it will introduce a wholesale CBDC pilot at the beginning of November, followed by a retail version shortly thereafter. Previously, (Oct. 4) Cleveland Fed President Loretta Mester said it's important for the Federal Reserve to understand "how to ensure security and balance privacy with transparency" in the event that the U.S. central bank decides to launch its own CBDC .