The Federal Reserve Bank of New York launched the New York Innovation Center (NYIC) to build and test fintech, such as CBDC (central bank digital currencies), stablecoins, and cross-border payments. Fed President John Williams said:
“We are thrilled to announce the opening of the New York Innovation Center. The work of the Center will be powered by new and different ways of thinking and experimenting, while leveraging the expertise and connections of this strategic partnership. I look forward to working with our co-collaborators as we begin to make progress on our areas of focus and collective mission.
The Center is the outcome of a strategic partnership between BIS (Bank for International Settlements) and the New York Fed. Jerome Powell, chair of the Federal Reserve, commented that the innovation center would promote collaboration and exchange of know-how among central banks. During a virtual event marking the launch of the NYIC, he added:
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.
PwC alum to lead Center
The Center intends to focus on a number of key areas according to the announcement of the launch. These include opportunity areas such as financial market infrastructures, supervisory and regulatory technology, future of money, climate risk, and open finance. PricewaterhouseCoopers (PwC) alum Per von Zelowitz, who joined the New York Fed in July, will lead the Center.
During the event, Zelowitz commented that the future of money, a critical area of focus, is connected to the Center’s work on digital currencies. Zelowitz said that this could also include work specific to stablecoins and cryptocurrencies and other areas that might be relevant from the perspective of Center stakeholders.
Agustín Carstens, general manager at BIS, also attended the event. He said:
The hub is not a think tank, it is a laboratory. It builds proofs-of-concept and prototypes using new technologies. It organizes hackathons to engage with the entire community, scout technologies and source ideas for projects.
He added that BIS planned to open more hubs in Canada and within the EEA.
New York joins growing list of BIS hubs
The list of BIS innovation hubs includes Hong Kong, Singapore, and Switzerland. This year, the Hong Kong center provided proof that distributed ledger technology and digital currencies could make cross-border payments cheaper and safer, including those via special apps.
