Digital USD is getting closer to reality

by nativetechdoctor
3 minutes read

The 35-page white paper that includes two possible codes that can be used to process transactions involving the digital dollar was released on February 3, according to digital USD is getting closer to realityo Bloomberg.

The work of creating a US digital dollar could take another step forward when the Boston Federal Reserve (Boston Fed) announces the code that can support such a currency. The Boston Fed in collaboration with the Digital Currency Institute of Technology has released a 35-page white paper on findings in technology research with a focus on developing software to process transactions. The researchers created and tested two potential codebases, including one capable of handling 1.7 million transactions per second.

“Both code architectures met and exceeded our speed and throughput requirements,” the Boston Fed said in a summary of the report.

The researchers wanted to be able to process 100,000 transactions per second and settle them in less than 5 seconds. Two codebases defeat that requirement. A joint research project separate from this one is being carried out by the US Federal Reserve (Fed), which aims to study the possible benefits and risks of a central bank’s digital currency. CBDCs). The Fed indicated that it would not plan to go ahead with a government-backed currency if it did not have the backing of the White House and Congress.

MIT and Boston Fed researchers have released OpenCBDC transaction processing software that, under an open-source license, allows anyone to inspect, modify, and enhance the code. “We believe this is the best way to ensure OpenCBDC is reviewed by a large number of people. All of these people will bring unique knowledge, skills, and ideas for improvement,” Neha Narula, Director of MIT’s Digital Currency Initiative, told reporters.

Tuesday’s release concludes the first phase of a multi-year “Project Hamilton” research initiative. This project was first announced in August 2020. The second phase will explore more complex possibilities and look at key issues, such as cybersecurity, and how to balance user privacy with the need for transparency to prevent criminal activity. offense.

The Fed says it will likely rely on intermediaries, including commercial banks or other regulated financial service providers, to provide accounts and facilitate digital dollar payments. digital. There is currently “uncertainty about who those middlemen are and how the information may be transmitted,” said Boston Fed Executive Vice President Jim Cunha.

The US pursuit of CBDCs could help ensure USD dominance, especially as other countries like China are moving forward with their own digital currencies. However, the Fed also pointed to a range of potential risks, including possible problems for financial firms and a reduction in deposits in the traditional banking system.

According to strategists at Bank of America Corp, the emergence of a digital US dollar is inevitable. They predict that the issuance will likely take place between 2025 and 2030. Mr. Cunha hopes the technological research on a possible CBDC will continue, at least for the next few years. “There is a lot of work to be done here,” Mr. Cunha said.

Related Posts

Leave a Comment

Adblock Detected

Please support us by disabling your AdBlocker extension from your browsers for our website.