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Some of the most significant players in the financial sphere are launching a digital dollar pilot program while the crypto sector suffers from FTX's dramatic downfall. 

About a dozen global giants, including Citigroup, HSBC, Mastercard, and Wells Fargo, announced plans on Tuesday to test the use of a digital token for 12 weeks in conjunction with the Federal Reserve Bank of New York, as they intended to examine how effective a digital currency is in speeding up payments.

Other firms also listed by the New York Fed include BNY Mellon, PNC Bank, Truist Financial, US Bancorp and TD Bank. All of the firms will participate in the project and use simulated data in a test environment. Banks will issue tokens which will be processed through a simulated central bank. 

"Programmable US dollars may be necessary to support new business models and provide a foundation to much-needed innovations in financial settlements and infrastructure," Tony McLaughlin, managing director for emerging payments and business development at Citigroup's treasury and trade solutions division, said in a statement. "Projects like this, that focus on the digitization of central bank money and individual bank deposits, could be expanded to take a broader view of the opportunity."

Earlier this year, cryptos crashed after TerraUSD lost its peg to the US dollar, causing other stablecoins to "break the buck," including Tether, the world's largest stablecoin.