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Digital dollar plan to launch US first CBDC test

Cryptocurrency

US CBDC Private Experiment

The US non-profit organization “Digital Dollar Project” announced on the 3rd that it will start at least five pilot programs in the next 12 months to examine the use cases of CBDC (Central Bank Digital Currency). Aim to guide the design of future US digital currencies.

The Digital Dollar Project is an organization born from a partnership between the Digital Dollar Foundation and Accenture, the world’s leading consulting firm. It aims to promote research and public debate on the benefits of the digital dollar and propose several models to support public institutions led by the private sector to encourage consideration of the introduction of the CBDC in the United States.

The CBDC trial program, the first in the United States, will investigate, analyze and identify technical and functional requirements, evaluate benefits and challenges, test applications and methods, and verify cases in retail and wholesale commercial use.

One of the co-founders of the Digital Dollar Foundation is former Chairman of the Commodity Futures Trading Commission (CTFC) Christopher Giancarlo. During his tenure, he appealed for flexible cryptocurrency regulations and was nicknamed “Crypto Papa” by the blockchain industry.

Accenture is also participating in CBDC projects in other countries, such as the Riksbank in Sweden and the Bank of France. The company has funded the operation of the digital dollar project, but will also fund the launch of this trial program.

Relation:Swedish central bank may issue digital currency within 5 years = Bloomberg

Providing information to related organizations

The Digital Dollar trial program will focus on the following areas and provide information to all parties, he said.

  • Gather empirical evidence of public policy and technical decisions that public authorities should consider
  • Inform about the merits and challenges of the US CBDC, opportunities, design and implementation methods, specific usage methods, etc.
  • Evaluation of standards and policies for the US CBDC, including international interoperability, key norms, and consumer protection

Since the US CBDC project has the aspect of digitizing the dollar, which is the world’s reserve currency, it sees issues that are different from other legal tenders, such as interoperability in international payments.

“The Digital Dollar Project Team will conduct research and experimentation in an open way to build ideological leadership to inform public policy,” said Giancarlo.

Collaboration with the Fed

One thing to keep in mind is that the Digital Dollar Project is a private sector, not a Federal Reserve Board (FRB) CBDC project with US currency issuance rights.

In response to Giancarlo, who emphasized the importance of public-private partnerships in building what is commonly known as the “digital dollar,” Fed Chair Powell previously said, “Private organizations should not be involved in the supply of currency. Central bank responsibilities and privileges. I have also said.

Relation:Fed Chair Denies “Public-Private Cooperation” With Digitization of US Dollar

Powell has also been cautious about issuing the CBDC, and at the Federal Open Market Committee (FOMC) meeting last month, the CBDC said, “It’s better than the first issue. It’s important. “

Relation:Fed Chair Powell mentions financial market overheating and digital dollars “GameStop DOGE Coin” Specific name in US FOMC Q & A

Contrary to the Fed’s attitude, the Digital Dollar Project explained that it has been reporting the progress of the project to the Fed immediately after its formation. On the project side, it complements other CBDC studies, including those by the Boston Fed and MIT, and takes the stance of “providing information on CBDC prerequisites identified by Fed researchers.”

In response to Powell’s cautious stance, Giancarlo said, “The United States does not have to be the first country to introduce the CBDC,” while “a leader in setting the standard for future money.” That is essential. “

To that end, he explained that demonstration experiments by private partner companies such as Accenture are extremely important. In particular, he said he needed a deeper understanding of how important social values ​​such as privacy, financial inclusion and legal compliance should be incorporated into the design of the CBDC.

Privacy concerns

China’s Digital RMB (DCEP) stands out from other countries in CBDC development, but Giancarlo adjectives the Digital RMB as “a credit system for monitoring the economic activities of citizens” and personal privacy. Was criticized for infringing.

He emphasized that it is important for the United States and other democracies to take the lead in incorporating the core of the issue of “constitutionally guaranteed protection of personal economic and social privacy” into the design of the CBDC. did.

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