Digital dollar: Mastercard, Wells Fargo, Citigroup, others and New York Fed start 12-week pilot test

Global banking giants are starting a 12-week digital dollar pilot with the Federal Reserve Bank of New York, the participants announced on Tuesday.

Citigroup Inc, HSBC Holdings Plc, Mastercard Inc and Wells Fargo & Co are among the financial companies participating in the experiment alongside the New York Fed's innovation center, they said in a statement.

The project, known as the "regulated liability network", will be conducted in a test environment and use simulated data, the New York Fed said.

The pilot will test how banks using digital dollar tokens in a common database can help speed up payments.

Earlier this month, Michelle Neal, head of the New York Fed's market's group, said it sees promise in using a central bank digital dollar to speed up settlement time in currency markets.