NY Fed’s Neal Says CBDC Can Cut FX Settlement to 10 Seconds (1)

A Federal Reserve Bank of New York experiment has found that a central bank digital currency using distributed ledger technology could reduce the time it takes to settle foreign exchange transactions from two days to under 10 seconds, a top New York Fed official said.

A team at the bank “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,” Michelle Neal, head of the New York Fed’s markets group, said Friday during a speech in Singapore.

“Results ...