e - cny in china, ” white paper ( beijing : people ’ s bank of china, july 2021 ), http : / / www. pbc. gov. cn / en / 3688110 / 3688172 / 4157443 / 4293696 / 2021071614584691871. pdf. - 9continue to play a lead role in the development of standards governing international digital financial transactions involving cbdcs consistent with norms such as privacy and security. given the dollar ’ s important role as a payment instrument across the world, it is essential that the united states be on the frontier of research and policy development regarding cbdc, as international developments related to cbdc can have implications for the global financial system. technology research and experimentation given the range of possible future states with significant digitization of the financial system, it is important that the federal reserve is actively engaging with the underlying technologies. our work to build 24x7x365 instant payments rails leverages lessons from some of today ’ s most resilient, high - performing, and large - scale technology platforms across the globe. it is providing important insights on the clearing and settlement models associated with real time payments as well as on fraud, cyber resilience, cloud computing, and related technologies. in parallel with the board ’ s public consultation on cbdc, the federal reserve bank of boston, in collaboration with the massachusetts institute of technology, has developed a theoretical high - performance transaction processor for cbdc. 16 they recently published the resulting software under an open - source license as a way of engaging with the broader technical community and promoting transparency and verifiability. 17 federal reserve bank of boston, “ project hamilton phase 1 a high performance payment processing system designed for central bank digital currencies, ” news release, february 3, 2022, https : / / www. bostonfed. org / news - and - events / press - releases / 2022 / frbb - and - mit - open - cbdc - phase - one. aspx. “ a transaction processor for a hypothetical, general - purpose, central bank digital currency, ” github, https : / / github. com / mit - dci / opencbdc - tx. - 10 moreover, the board is studying how innovations, such as distributed ledger technology, could improve the financial system. this work includes experimentation with stablecoin inter

##operability and testing of retail payments across multiple distributed payment ledger systems. the federal reserve bank of new york recently established an innovation center, focused on validating, designing, building, and launching new financial technology products and services for the central bank community. 18 these technology research and development initiatives are vital to our responsibilities to promote a safe and efficient payment system and financial stability, whatever the future may bring. conclusion the financial system is not standing still, and neither can we. the digital financial ecosystem is evolving rapidly and becoming increasingly connected with the traditional financial system. it is prudent for the board to understand the evolving payment landscape, the technological advancements and consumer demands driving this evolution, and the consequent policy choices as it seeks to fulfill its congressionallymandated role to promote a safe, efficient, and inclusive system for u. s. dollar transactions. 19 to prepare for the financial system of the future, the federal reserve is engaging in research and experimentation with these new technologies and consulting closely with public and private sector partners. federal reserve bank of new york, “ new york fed launches the new york innovation center to support financial technology innovation in central banking, ” press release, november 29, 2021, https : / / www. newyorkfed. org / newsevents / news / aboutthefed / 2021 / 20211129. see board of governors of the federal reserve system, “ fostering payment and settlement system safety and efficiency ” in the fed explained, 11th ed.