- central bankers'speeches project cedar is the inaugural project of the nyic and represents the first stage of the nyic's research efforts into cbdcs, the nyic's biggest focus area in 2022. a goal of the nyic is to progress cbdc research with an objective of defining a technical design for a cbdc addressing the wholesale market in the federal reserve context. after taking a close look at the foreign exchange space with economists, traders, and market analysts, the nyic team zeroed in on settlement of foreign exchange spot transactions as a first area of investigation. fx spot transactions are critical in the context of cross - border payments, and serve as a building block for longer, more complex transactions. traditionally, settlement generally takes two days after a transaction, which leaves some room for improvement. by demonstrating improvements in settlement of fx spot transactions, the nyic could address settlement time and risk, which would have implications to speed and access for the broader cross - border market. we are not the first to address this topic, of course, but the nyic wanted to investigate it from the perspective of the federal reserve, through the lens of a wholesale cbdc. the nyic developed a hypothesis that there is a distributed ledger technology solution for wholesale fx settlement that results in instant and atomic settlement in which a wholesale cbdc is the settlement asset. nyic then built a working prototype and tested it. results from the experiment indicated that settlement could occur in fewer than 10 seconds on average and that horizontal scaling was possible. this indicates that a modular ecosystem of ledgers has the potential for continued scalability, and that distributed ledger technology could enable settlement times well below the current industry standard of two days, with the added guarantee of atomic settlement. conclusion innovations in digital assets have the potential to impact financial markets in many fundamental ways ; it is essential to understand these developments and the impact they may have on the mission of the federal reserve. through ongoing investment in research, experimentation, and collaboration, leveraging the full potential of digital assets is possible. i look forward to building on the successes of project cedar and similar efforts. 1 the white house, fact sheet : white house releases first - ever comprehensive framework for responsible development of digital assets, september 16, 2022 2 cnbc, " terra backers vote to revive luna - but not ust - after $ 60 billion crypto collapse, " may 25, 2022 3 vice chair lael brainard, " crypto - assets

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