New York Fed and Bank for International Settlements release research report testing tokenized monetary policy tools

The Federal Reserve Bank of New York and the Bank for International Settlements (BIS) have jointly released a research report called "Project Pine" to test the feasibility of using smart contracts to implement monetary policy in tokenized financial markets. The Project Pine research report shows that the New York Federal Reserve Innovation Center and the BIS Innovation Hub have jointly developed a prototype of a central bank monetary policy implementation toolkit based on smart contracts. This toolkit supports operations such as interest rate payments, asset purchases, and mortgage management, and has been tested in 10 historical simulation scenarios, including market turbulence and liquidity tightening. The report points out that smart contracts have the ability to quickly deploy and adjust monetary policy tools, providing flexibility and efficiency for future central bank policy implementation in tokenized financial systems. However, it also emphasizes the need to pay attention to interoperability, data standards, and potential operational risks.