While it appears that the U.S. is currently examining aspects of the CBDC it is considering, the Federal Reserve Bank of Boston has released a study on the codes that could support this vision.
According to Bloomberg, the study focuses on the first phase of the journey into CBDC, which is the development of software to handle digital transactions.
The study, conducted by the Federal Reserve Bank of Boston and MIT's Digital Currency Initiative, examined two possible codebases.
At the first base, their goal was to obtain a code that could process 100,000 transactions in 5 seconds. However, their discovery revealed something better, as they developed a code (software) that could process up to 1.7 million transactions per second.
The software is called OpenCBDC. It is open source licensed software, so it is possible to check and modify features that can enhance the code.
We believe this is the best way to ensure that OpenCBDC gets reviewed by a large number of people – all of whom will bring unique knowledge, skills and ideas for improvement," said Neha Narula, director of the MIT Digital Currency Initiative, in an interview. "
It is worth adding that this study is separate from the Fed's ongoing research on the potential risks and benefits of digital currencies for U.S. central banks.
While Thursday's release marks the end of phase one of the study and focuses on software development, the next phase (phase two) will conduct due diligence in other areas, such as
Cybersecurity and how to balance user privacy with the need for transparency to deter criminal activity.
The Fed, led by Chairman Jerome Powell, has said it will not push for any government-backed coinage unless the legislative branch of government pushes for it. If that eventually comes to pass, the Fed says it may rely on intermediaries such as regulated financial institutions.
Developing CBDC is no longer a big deal in the world. In fact, for a country like the United States, which is expected by many to lead the revolution, it will catch up with China, Nigeria and other countries that have made several degrees of progress in driving the revolution.
However, if the country develops its digital dollar, it will maintain an advantage as it could strengthen the currency's dominant position globally.
What do you think about this topic? Write to us and tell us
All information contained on our website is published in good faith and for general information purposes only. Any action taken by readers with respect to the information on our website is entirely at their own risk.