The Federal Reserve's exchange ambitions go far beyond technological innovation—they are essentially using rules to assert international financial discourse.

Looking at the architecture of this exchange makes it clear. It integrates various privacy-enhancing technologies such as zero-knowledge proofs, multi-party secure computation, and homomorphic encryption. The underlying logic is straightforward: to meet privacy needs with regulatory-friendly anonymity (achieved through ZKP), coordinate regulatory efforts across different countries with multi-party computation (MPC) support, and protect sensitive data analysis with homomorphic encryption.

This combination has three key advantages. First is adaptability—the same set of technologies can flexibly respond to the EU's MiCA data rights requirements and also meet the US GENIUS Act's focus on institutional regulation, making it applicable worldwide. Second is control over standards-setting. The Federal Reserve, through the "Hamilton Plan," open-sources technical standards, gradually making protocols like MPC and homomorphic encryption into international norms, indirectly strengthening the dollar's position in crypto settlements. The third and most critical point is that this technology enables a full process of on-chain data analysis, cross-institutional joint computation, and result verification, filling regulatory gaps in traditional finance within the DeFi space.

Looking deeper, the integration of privacy technologies grants the Federal Reserve unprecedented control. By analyzing global stablecoin reserve structures with homomorphic encryption and coordinating regulatory actions among central banks via multi-party secure computation, it ultimately consolidates the dollar's central role in the crypto ecosystem. This is not just a technological upgrade but a subtle shift in financial power.