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It is important to separate speculation crypto underlying blockchain technology tokens trading and prices, Bank of America (BAC) said in a research report Thursday after a group of major banks and the Federal Reserve Bank of New York began testing the use of digital tokens representing dollars.

Citigroup (C), HSBC (HSBC), BNY Mellon (BK) and Wells Fargo (WFC) are among the participants, as is payments giant Mastercard (MA), the New York Fed announced on Tuesday.

Despite the backlash that followed the collapse of crypto exchange FTX and its sister company Alameda Research, “the development of applications that leverage distributed ledger and blockchain technology continues to advance,” wrote analysts Alkesh Shah and Andrew Moss.

The Benefits of a Digital Wholesale Central Bank currency (CBDC) include a faster settlement period, which could allow financial institutions to reallocate funds that were otherwise held as collateral into yield-earning investments, the bank said. Other benefits include reduced costs, reduced credit risk and increased transparency.

Bank of America says a wholesale CBDC can be issued before a retail CBDC “due to less complexity related to banking system design, privacy, and disintermediation.”

Central banks and governments should drive innovation in digital assets by leveraging the private sector, the note says, and this will create new revenue streams. Governments can contract payments and consulting firms for their expertise, but the greatest revenue opportunity probably exists for “infrastructure providers who offer distributed ledger platforms, cloud storage, cybersecurity, custody of digital assets/wallets and telecommunications for offline access”.

According to the report, potential beneficiaries will depend on the type of CBDC implementation approach used.

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