Central banks are starting to investigate how programmable blockchain technologies could transform the implementation of monetary policy. A recent pilot initiative, Project Pine, carried out by the Federal Reserve Bank of New York’s Innovation Center in collaboration with the BIS Innovation Hub (Swiss Centre), showcases how smart contracts might provide more adaptive and responsive tools within a digitized financial system. Moving away from outdated, sluggish infrastructure, the experiment simulated blockchain-based tools enabling rapid adjustments to monetary conditions in real time. In one example, smart contracts allowed near-instantaneous changes to collateral requirements and interest rates, responding within minutes to hypothetical market shocks. The prototype was built using Ethereum-based token standards and featured access controls to ensure a simulated secure environment.

Although the outcomes were encouraging—demonstrating notable flexibility and speed—researchers pointed out that most existing financial systems are not yet prepared to support this degree of technological integration. Outside the test setting, interest in tokenization is expanding swiftly. At Consensus 2025, Joseph Spiro from DTCC Digital Assets highlighted stablecoins as ideal vehicles for real-time financial activities such as collateral transfers in derivatives markets. While still experimental within the public sector, initial results indicate that programmable finance could become an essential component of the monetary policy toolkit in the coming years.