Digital Dollar Project Launches 5 Pilots to Measure Value of US CBDC
The Digital Dollar Project (DDP) is launching at least five pilot programs over the next year.
The projects will measure the value of a U.S. central bank digital currency (CBDC) and inform its future design. The DDP is a non-profit partnership between consultancy Accenture and the Digital Dollar Foundation. It was created last year to encourage research and public discussion about the potential advantages of a US CBDC.
The pilot projects
More specifically, the projects will address several lines of inquiry. First, they will explore, analyze, and identify technical and functional requirements for issuing a CBDC. They will gather empirical evidence which will inform the policy and technology decisions that developers need to consider.
Another project will assess the benefits and potential challenges of issuing a CBDC. This will also involve addressing the design, implementation, and specific use of the digital dollar. This will obviously involve testing different applications and approaches.
Finally, there will be a project that considers the potential use cases for both retail and wholesale commercial utilization. It will focus on evaluating and cataloging emerging standards and policies. This will particularly be the case with respect to global interoperability and the preservation of key norms and consumer protections.
The process to begin evaluating and prioritizing the five pilots is already underway. Additionally, the first three will be announced within the next two months. Accenture provided an initial investment to the DDP. It also intends to match the funds if necessary to launch any successive pilot programs.
The DDP will release the results of and insights from the pilots to the public. Particularly for use in academic study, as well as policy consideration by Congress. In doing so, it hopes to serve as a neutral platform to explore the future of the CBDC.
Efforts towards a digital dollar
The projects intend to complement other important CBDC work. This includes other projects including those of the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology.
The U.S. Federal Reserve (Fed) is among many central banks around the world considering the introduction of a CBDC. According to a recent survey, 80% of the world’s central banks are researching or experimenting with issuing CBDC. These include the People’s Bank of China, the European Central Bank, and the Bank of England.
“The U.S. doesn’t need to be first to the central bank digital currency, but it does need to be a leader in setting standards for the digital future of money, which is why our pilot testing collaboration with Accenture and other partners is so critical,” said Digital Dollar Foundation co-founder J. Christopher Giancarlo. Fed Chairman Jerome Powell had earlier echoed these sentiments.