Powell says new innovation center will help Fed improve payments

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O Federal Reserve of New York launched a new innovation center on Monday (29) that will support the central bank as it explores the possibility of creating a digital currency, assesses the financial risks associated with climate change and addresses other issues, such as infrastructure and regulation of the financial market.

The center, in partnership with the Bank for International Settlements (BIS) Innovation Center, will help the Fed improve the current payments system, said Federal Reserve Chair Jerome Powell in prepared comments for a virtual event this Monday.

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“In particular, the partnership will support our analysis of digital currencies – including central bank digital currencies,” said Powell, adding that the center will focus on making international payments faster and cheaper, as well as providing new tools to help with oversight of financial companies.

Powell did not comment on his outlook for the economy or monetary policy during the speech.

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The Fed is currently exploring whether to release a digital version of the US dollar, and the Fed’s board is working on a discussion paper that would explore the issues of monetary policy around the central bank’s digital currency.

New York Fed researchers have also developed an approach to measuring banks’ exposure to risk-related climate changes, potentially an initial step in assessing whether financial institutions have sufficient capital available to support them.

Reference: CNN Brasil

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