- 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

assessments of financial stability. our ambition is to learn more about how the banks affect each other and the economy in stress situations. another task for danmarks nationalbank in relation to financial stability is to ensure that denmark has a secure and effective financial infrastructure that can safely be used for settlement of payments, securities trading and other financial transactions. danmarks nationalbank now has a statutory obligation to oversee payment and settlement systems in denmark. part of the imf's fsap was to assess the core elements of the danish financial infrastructure in relation to international standards. the imf recommended a few changes. danmarks nationalbank will work with those responsible for the systems to ensure that the necessary improvements are made. however, we will not blindly adhere to all recommendations. for example, the imf recommends that we establish a buffer pool to ensure the settlement of securities transactions and retail payments even if the largest participant is not able to settle its payment obligations. danmarks nationalbank finds that the best safeguard is to ensure that participants have easy and flexible access to liquidity, combined with participants'large portfolios of securities that can be pledged as collateral for loans from danmarks nationalbank. consequently, we do not currently see any need for special measures to ensure settlement in the danish systems. a third area that we are looking at is situations where the financial system is affected by dramatic external events. these could be acts of terrorism, widespread epidemics, natural disasters or other situations where the financial system threatens to collapse. danmarks nationalbank chairs a task force to ensure coordination of the financial institutions'business continuity plans in such situations. finally, danmarks nationalbank acts as lender of last resort to the danish banks. danmarks nationalbank can extend loans to a bank that urgently needs liquidity and cannot procure it in the market, even though the bank is solvent. fortunately, we are seldom called on to do that. should a situation occur where it is necessary to rescue an ailing bank, danmarks nationalbank's position is that a market - based solution should be found. nothing definite can be said beforehand about danmarks nationalbank's role. it would depend on a concrete assessment of the situation and the – direct or indirect – consequences for the danish banking system and danish society. however, we can look at what danmarks nationalbank has done on previous occasions. in a number of cases, danmarks nationalbank has played a role in connection with public intervention to help ailing banks – by