BIS: Central banks experimenting with monetary policy using smart contracts

Active adoption of blockchain technology by BIS (Source: BIS)

Central banks are experimenting with monetary policies using smart contracts and seeking possibilities to integrate traditional finance and blockchain technology. According to Cointelegraph, the Bank for International Settlements (BIS) reported in a report that "central banks are testing a tailor-made tokenization toolkit prototype called Project Pine."

BIS assessed, "If the tokenization of money and securities spreads widely, smart contracts could become a key means of executing monetary policy." Project Pine is an experimental step in which central banks control and manage tokenized assets, exploring the potential for combining traditional financial systems and blockchain technology.

This project is jointly promoted by the New York Innovation Center under the Federal Reserve Bank of New York and the BIS Innovation Hub, testing the policy applicability of digital currency and smart contracts.

Experts predict that if this experiment succeeds, it could bring significant innovation in the implementation of **Central Bank Digital Currency(CBDC)** and monetary policy execution.