The Federal Reserve Bank of Boston and the Massachusetts Institute of Technology (MIT) plan to reveal the results of their research into a digital dollar “as soon as July,” Bloomberg reported today.
James Cunha, head of the digital dollar project at the Boston Fed, noted that the researchers already have at least two prototype platforms that allow users to hold the currency and make transactions using digital dollars. However, he did not clarify whether any of these prototypes are based on blockchain technology.
“We think it’s important that we not wait for the policy debate because then we’ll be a year or so behind. This will take significant outreach to the industry and serious debate,” Cunha added.
A CBDC could disrupt the finance industry
Colloquially dubbed “Fedcoin,” a US digital currency would potentially create an electronic alternative to paper dollar bills—and players from the traditional finance industry are not happy.
“Everyone is afraid that you could disrupt all the incumbent players with a whole new form of payment,” Michael Del Grosso, an analyst at Compass Point Research & Trading, told Bloomberg.
Last week, Federal Reserve chairman Jerome Powell said that a potential digital dollar can “coexist” with traditional cash if it’s regulated accordingly, citing a recent Bank for International Settlements report.
“One of the three key principles highlighted in the report is that a CBDC needs to coexist with cash and other types of money in a flexible and innovative payment system,” Powell said.
Meanwhile, major payment companies such as Visa and Mastercard are already looking to add support for potential Central Bank Digital Currencies (CBDCs) to their platforms.
“We’re increasingly having conversations with central banks as they think about designing potential central bank digital currency, CBDC, and we’re talking to them about how they think about design,” said Oliver Jenkyn, president of Visa North America, earlier this month, adding, “So there’s a lot of talking, but there’s actually a lot of action alongside it as well.”
Last December, Visa proposed an offline payment system for CBDCs which could allow the signing of transaction messages without an active Internet connection.
As Decrypt reported, blockchain payments-focused firm Ripple has also recently revealed its pilot of a new private ledger tailored specifically for CBDCs.