The study, dubbed Project Pine, tested a prototype “generic customizable monetary policy tokenized toolkit” for further research by central banks, according to a BIS report published May 15.“The smart contract toolkit was fast and flexible,” the BIS wrote.“In hypothetical scenarios, the central bank was able to add and change tools instantly.”The report emphasized that if tokenization becomes widely adopted for money and securities, smart contracts could play a central role in how monetary policy is executed.
Source: BISRelated: Coinbase faces $400M bill after insider phishing attackSmart contracts, tokenization may help central banksSmart contracts and tokenization technology may help central banks’ rapid response to “extraordinary events,” the BIS report said:“This speed, coupled with the ability to adjust any of the parameters at any time, gives central banks flexibility in responding to unforeseen events and fast-moving crises.”While promising, the report also acknowledged that central banks will likely face infrastructure challenges, as most existing systems are not designed for these advanced use cases.
According to a joint research study by the Federal Reserve Bank of New York’s Innovation Center and the Bank for International Settlements (BIS) Innovation Hub Swiss Centre, smart contracts could offer central banks flexible, rapid-response tools in a tokenized financial system.
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Author / Journalist: Cointelegraph by Zoltan Vardai
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