Boston Fed Is Looking at ’30 to 40′ Blockchain Networks for Digital Dollar Experiments – CoinDesk
The Federal Reserve Bank of Boston, one of 12 regional Federal Reserve banks operating under the U.S. central bank, is evaluating more than 30 different blockchain networks to determine if they would support a digital dollar.
“I would think we’re probably looking at 30 to 40 different either open source or private solutions at a very high level first, and then doing a deeper dive into a few of them, because we’re in the early stages of this, and we want to make sure we have the broadest view possible,” Cunha said.
“We’re excited about this collaboration because DCI’s goal is to answer the fundamental questions necessary to determine under what circumstances a CBDC is a good idea, and how we might deploy one should a central bank decide to do so,” she said. “Working closely with one of the largest central banks in the world is incredibly helpful in terms of getting real-time input on how to frame and answer these questions.”
A number of factors will be considered during the research effort. Narula noted that a retail-focused CBDC would need low latency and high throughput, meaning it would need to be able to process a large number of transactions per second, while remaining secure.
Like Cunha, he emphasized that throughput is an important area of concern, saying whatever engine powers the CBDC would need to be able to support “the world’s largest currency’s transactions.”
The Boston Fed has been looking at distributed ledger technology since 2015 or 2016, Cunha said, and has published numerous papers on the subject. The group has also looked at similar central bank digital currency and payment efforts by other central banks, including the Monetary Authority of Singapore’s Project Ubin and Canada’s Project Jasper.
This goal hasn’t changed. While private digital currency efforts like Libra and CBDC projects like China’s digital yuan may have created a bit more urgency to the Boston Fed and DCI’s work, there’s no mandate or timeline to launch a digital dollar by.
If anything, the fact that there are now multiple efforts underway to create a mainstream-accessible cryptocurrency might just indicate that distributed ledger technology “actually may have legs,” and has the potential to be incorporated into payment and monetary systems’ infrastructure in the future.
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