While the crypto market is shaken by the failure of FTX, a digital asset settlement platform will be going live inside the financial system of United States (U.S.) for 12 weeks testing the regulatory framework existed in the United States as well as the adoption and collaboration of the broader U.S. banking community.
A group of banking institutions including HBSC, Mastercard, PNC Bank, SWIFT and TD bank among others will participate in this experimental project alongside the New York Federal Reserve Bank.
The project, that will be using Distributed Ledger Technology (DLT) (e.g., blockchain) and it will run exclusively on US dollars, has as a main scope the simulation of digital money issued by regulated entities in the U.S. context.
The pilot will test how banks using digital dollar tokens in a common database can help speed up payments. The banking group stated that they are not committed to further development of the project. Also, it is important to note that during this project only simulated data will be used. Despite that, there is potential for digital money to be used in multi-currency operations and regulated stablecoins.