Digital Dollar Project to Carry out First US CBDC Tests
The first of its kind digital currency in the history of America is set to be launched. The US non-profit Digital Dollar Project announced Monday to float pilot programs focusing on testing the potency of US CBDC usages.
The Digital Dollar Project is the first private-sector pilot and it existed based on the partnership between Accenture and the Digital Dollar foundation for the promotion of research and investigation into a US central bank digital currency.
Accenture and several others led the private-sector pilot funding efforts to generate helpful data for US policymakers to see the central bank Digital dollar becoming a reality. The digital dollar is not the first project worked on by Accenture; it has worked on several CBDC projects in Canada, Singapore, and France.
CBDCs aim to achieve improved payment systems and challenge the threats of cryptocurrencies. CBDCs are just the Digital equivalent of banknotes, and they are fully government-backed.
The US Federal Reserve is handling the CBDCs carefully, working with the Massachusetts Institute of Technology (MIT) to achieve the best digital dollar result ever wanted, which Jerome Powell supports as necessary.
Giancarlo suggests the need for the US to incorporate values such as privacy and freedom of commerce and speech in the CBDCs development.
The next two months will see the launching of three pilot programs, complementing the Fed’s MIT project to gather data highlighting the potential uses of the digital dollar. It would be available to the public.
A digital dollar would expand financial inclusion access to mainstream financial services among Americans, with minimal transaction fees.
However, a senior managing director at Accenture, David Treat, has explained that CBDCs would exist to bridge the incapacities and not to serve as a replacement for other forms of money.
According to him, “It’s not a panacea for all money; we will be using physical cash and coins for some time.” He also went on to say that “of course, until it’s something that is minted and issued by the Federal Reserve, it won’t be a central bank digital currency, but the advantage we have is it’s the same underlying structure, we can use a stablecoin structure to directly demonstrate how a CBDC would perform, and the only difference is who the issuer is.”
The Accenture executive also added that results could be expected to come in quickly. In his words “some of them we’ll be able to get results fairly quickly, measured in months, not quarters, and we’ll extend well into 2022,” Treat said. “As individual pilots are completed, we’re going to share those results,” he concluded.