Central banks are experimenting with smart contracts to implement monetary policy in tokenized environments, signaling a growing interest in integrating blockchain technology into traditional finance (TradFi). 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 a flexible and rapid-response toolkit in a tokenized financial system. 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
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