OFR Plays a Leading Role in Developing Standards for Emerging Technologies
Published: May 31, 2023
Earlier this month, President Biden released the National Standards Strategy for Critical and Emerging Technology. The Strategy is intended to better safeguard consumer technology and promote international-standards development. As the President noted in his announcement, many agencies are already partnering with their international counterparts to advance standards.
The Office of Financial Research (OFR) is one of the offices involved in this effort and collaborates with other standards-setting organizations on the development, adoption, and use of data standards. As part of this initiative, OFR works with the International Organization for Standardization (ISO) and the Accredited Standards Committee X9 Inc. (X9) to develop financial-data standards for digital identities, digital assets, and distributed-ledger technologies.
Physical currencies and financial instruments have standards for core data elements, identification, and security—and it is crucial to develop such standards for data associated with digitized assets and currencies. In the digital environment, validating parties and supporting faster real-time processing via quantum computing require data standards. Some standards, such as ISO 4217 (Currency Codes), exist today. Others may be adopted or developed to meet specific requirements.
The OFR contributed to the development of an ISO advisory group report on central and nonfiat digital bank currencies. A key aim of this report was to identify use cases for these currencies and provide recommendations regarding data standards that support these cases. The OFR worked in close coordination with the leadership of the X9 to bring U.S. expertise to bear in preparing this report.
The OFR also leads an X9 working group that addresses gaps in the security and integrity of blockchain and distributed-ledger technologies for payments and financial services. Finally, the OFR recently led the development of a proposal for a technical report to be titled TR60: Risk Assessment Framework for Bank-Provided Crypto-Asset Custodial Accounts.
I applaud our federal partners, standards development organizations, and the private sector for their efforts to analyze and establish standards to meet the demand for digital identities, digital assets, and distributed-ledger technologies. We must ensure that all parties involved reach a voluntary consensus on standards and work together to guarantee the safe and sound development of these emerging technologies.
James Martin is the Acting Director of the Office of Financial Research