U.S. Federal Reserve Chair Jerome Powell is revealing a partnership between the Federal Reserve System and the innovation arm of the global central banking body Bank for International Settlements (BIS).
In a speech delivered at the opening of the New York Innovation Center, based at the Federal Reserve Bank of New York, Powell says that “rapid innovation” is transforming the financial sector.
“Certainly, rapid innovation, including through the application of advanced digital technologies, machine learning, artificial intelligence, and big data, is revolutionizing the financial sector.”
Powell says that the purpose of the New York Innovation Center will be to “analyze and bring technology to bear on improving the global financial system.”
The Fed Chair says that the New York Innovation Center will partner with the BIS Innovation Hub, the Bank for International Settlements’ arm charged with fostering innovation among central banks worldwide.
“Increasing the synergies of the New York Innovation Center will be its strategic partnership with the BIS Innovation Hub, recently established to foster dialogue, collaboration and knowledge-sharing among central banks and other authorities and institutions.
In particular, the partnership will support our analysis of digital currencies – including central bank digital currencies; help to improve our current payment system – with a particular focus on making cross-border payments faster and less expensive, and it will provide new tools to aid our supervision of the financial system.”
A few weeks ago, Powell told Congress that there were no plans to ban cryptocurrencies while at the same time saying that stablecoins required to be regulated.
“No intention to ban them [cryptocurrencies]. But stablecoins are like money market funds, they’re like bank deposits.
But they’re to some extent outside the regulatory perimeter, and it’s appropriate that they be regulated. Same activity, same regulation.”
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxFeatured Image: Shutterstock/Mia Stendal/Vladimir Sazonov/Andy Chipus