Seeds of Wisdom RV and Economic Updates Wednesday Evening 5-14-25
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CENTRAL BANKS PREPARE FOR A TOKENIZED FUTURE
Imagine a financial world where every transaction, from billion-dollar treasury purchases to retail payments, exists entirely as digital tokens. The Federal Reserve Bank of New York and the Bank for International Settlements (BIS) Innovation Hub aren’t just imagining it — they’re actively preparing for it through Project Pine.
The New York Innovation Center (NYIC), part of the Fed’s New York branch, launched this groundbreaking initiative with the BIS Innovation Hub, creating a toolkit of smart contracts designed to execute central banking functions in a fully tokenized financial system. The toolkit supports paying interest on reserves, conducting open market operations, managing collateral, and supporting credit and asset purchases – all via tokenized processes.
Six additional central banks contributed requirements, emphasizing the need for flexibility. This focus led to a surprising advantage: dramatically faster crisis response.
Faster Emergency Response in Digital Financial Markets
Crises strike without warning. In traditional finance, it takes time to implement new emergency facilities. With Project Pine, central banks could design and launch responses almost instantly thanks to pre-built smart contracts.
“Tokenization accelerates money velocity,” the report notes, “which means financial shocks may unfold faster – requiring faster central bank action.”
Smart contracts are the backbone of this efficiency. Central banks would still use human judgment for critical decisions, but automating operations like collateral handling and haircut settings could reduce friction in emergency interventions.
Smart Contracts to Power 24/7 Central Banking
The prototype assumed a fully tokenized ecosystem operating 24/7, which would require automated yet safe systems outside traditional business hours.
Though the smart contracts were built using Hyperledger Besu and Solidity (Ethereum-compatible), the team stressed their technology-neutral stance.
Project Pine is not policy — it’s exploration. But its foresight equips central banks to handle the transition to tokenization and anticipate how their core functions might evolve.
By planning ahead with Project Pine, central banks aren't just preparing for the next phase of finance — they’re shaping it.
@ Newshounds News™
🔗 Source: Ledger Insights
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CRYPTO EXECS FLOCK TO DC TO SUPPORT SENATE STABLECOIN BILL
Coinbase CEO Brian Armstrong said the Senate could reconsider a vote on the GENIUS Act “hopefully tomorrow” after it initially failed on May 8.
Crypto leaders, including founders and executives from major companies, have traveled to Washington, DC, in a major push to rally support for the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which failed to pass the Senate earlier this month.
60 Crypto Founders Push for Urgency
In a May 14 X post from the US Capitol rotunda, Armstrong revealed that “60 [crypto] founders” were in DC to advocate for the GENIUS Act and a market structure bill currently under consideration in the House of Representatives.
“Like any good negotiation, there’s a lot of details to work out at the last minute, but we’ve been stressing the urgency of this,” Armstrong stated.
The Senate may vote again on the GENIUS Act “hopefully tomorrow,” signaling renewed momentum despite political obstacles.
Political Tensions Over Trump’s Crypto Involvement
Many Democratic lawmakers are withholding support due to concerns about Donald Trump’s crypto ventures, including his TRUMP memecoin and the USD1 stablecoin launched by his family-affiliated World Liberty Financial. Democrats have demanded carve-outs or provisions to ensure Trump cannot profit politically or financially from crypto legislation.
A Democratic staffer told Cointelegraph there was “no indication” Republicans would address these concerns. Another source claimed addressing them may be unconstitutional.
Is Bipartisan Crypto Reform Possible?
The Senate resumed consideration of the GENIUS Act on May 12, and another vote is expected within days. While Republicans control both chambers, a 60-vote majority is required to overcome a filibuster, necessitating at least partial Democratic backing.
“Despite the politics around the TRUMP memecoin and crypto investments — that has definitely made our work more complicated — I still argue that behind the scenes, you've got constructive members in both parties working to find consensus,” said Representative French Hill at the Consensus conference in Toronto.
Whether the GENIUS Act can move forward without adjustments remains unclear, but the growing presence of crypto leaders in Washington underscores the urgency and high stakes involved.
@ Newshounds News™
🔗 Source: Cointelegraph
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