This is something the BIS (and BlackRock et al.) has been extremely interested in.
First up, from the Federal Reserve Bank of New York, May 14:
Press Release
Joint Study Explores Feasibility of Central Bank Operations Using Tokenization and Smart Contracts
NEW YORK—The Federal Reserve Bank of New York and the Bank for International Settlements (BIS) today published a joint research study that explored if and how central banks could continue to implement monetary policy operations in hypothetical tokenized wholesale financial markets.
Project Pine, from the New York Innovation Center at the New York Fed and the Swiss Centre of the BIS Innovation Hub found that central banks could customize and deploy policy implementation tools using programmable smart contracts in a potential future state where commercial banks and other private sector financial institutions have widely adopted tokenization for wholesale payments and securities settlement.
The project generated the prototype of a generic monetary policy implementation tokenized toolkit for potential further research and development by central banks across jurisdictions and currencies. The prototype was designed to be technically modifiable for different central banks’ monetary policy frameworks and calibrated to conduct standard or emergency market operations.
The toolkit prototype was created in consultation with central banks’ financial markets advisors from multiple jurisdictions, who helped outline the project scope and specific design requirements. It is not particular to any currency or jurisdiction. It can fulfill a common set of central bank implementation requirements, including paying interest on reserves, open market operations, and collateral management....
....MUCH MORE
And from the Bank for International Settlements, May 14:
Project Pine: central bank open market operations with smart contractsProject Pine explores if and how central banks can continue implementing monetary policy operations in a tokenised world.
Project Pine: exploring monetary policy implementation in tokenised financial markets (00:05:08)14 May 2025 BIS Innovation Hub
Project Pine is a joint research study by the New York Fed's New York Innovation Center and the BIS Innovation Hub Swiss Centre that explores if and how central banks can implement monetary policy in a potential future state where the financial sector widely adopts tokenisation in wholesale markets.
The project team successfully built a toolkit prototype using smart contracts. The prototype has the capability to pay interest on reserves and create facilities that temporarily exchange reserves for collateral (and vice versa), swap assets, and execute asset purchases and sales.
It was tested using hypothetical scenarios based on past market events (like interest rate tightening and easing cycles, quantitative easing and tightening cycles, and periods of strained market liquidity or broader disruptions in markets).
The project demonstrated that central banks could use this new technology to carry out their existing roles if tokenisation is widely adopted. If payments and securities are tokenised, the benefit to central banks would differ based on circumstances and existing operations. Yet Project Pine found that central banks could use smart contracts to easily and quickly create new facilities or adjust existing ones to optimize the implementation of monetary policy in a tokenised environment.
Project Pine's results offer central banks a starting point for better understanding the opportunities, risks, and requirements of adopting tokenisation in their respective jurisdictions. Technical experimentation is still at an early stage and there are more areas for future research and collaboration.....
....MUCH MORE, report download, background material.
Previously on the BIS:
February 2024 - The Bank For International Settlements Tokenization/Cyber Projects For 2024
February 2024 - "BIS, World Bank, Swiss National Bank to Tokenize Promissory Notes"
February 2024 - "Tokenized, Inc: BlackRock's Plan To Own The Fractionalized World"
February 2024 - BIS Still Pushing Tokenization, This Time In The Metaverse
note, May 14, 2025 -The Bank for International Settlements has decided to withdraw from the mBridge project
July 2024 - BIS: "Finternet: the financial system for the future"
