We saw the publishing of technical research and open-source code that could be the groundwork for digitizing the greenback.
There were no definitive plans to develop a CBDC mentioned in the paper as any decision must pass Congress first, according to reports. On Feb. 3, executive vice president at the Boston Fed, Jim Cunha, said:
“There has been no decision to move past this research phase, but if a CBDC was launched it would be something that would have to evolve over time,”
No Digital Dollar Yet
The development of the CBDC will take several years under a program dubbed “Project Hamilton.” The first phase of it will focus on developing software that is “flexible and resilient,” the report added. The experimental code is capable of 1.7 million transactions per second, and most of them settle in under 2 seconds, according to the researchers.
The researchers said that features such as intermediaries or fees could be added after policymakers decide on the best path forward for the digital currency. The Fed and MIT will look into security, privacy, and programmability in the next phase of the research.
It could be a long road ahead, though, as U.S. policymakers have been known to drag their feet when it comes to digital finance technologies. According to a Bank of America report released last month, the U.S. will launch a CBDC by 2030. Fed Chair Jerome Powell has said that the country must get it right rather than trying to be first.
China Steams Ahead
America has already lost that race as China is steaming ahead and India is set to follow. China’s digital yuan is getting a global premiere at the Winter Olympics in Beijing. International visitors at the Olympic Village will get to experience its CBDC for the first time, according to reports.
Last month, the People’s Bank of China (PBoC) announced that 261 million individuals, or around a fifth of the country’s population, have now set up digital yuan wallets.
India is also catching up with reports suggesting that it will launch its own CBDC next fiscal year.