Digital Dollar Profit, a non-profit organization in the US announced on Monday that it will initiate five pilot programs in the coming months, the first of its kind. The move is to analyze potential uses of a digital currency from a central bank in the United States.
The initial funding for these private sector pilots would be from Accenture PLC. It would later be interfered with by NGOs, financial firms, retailers, and many others. Through this, the foundation aims to collect data that can help make a digital dollar in the US.
Digital Dollar Project is a partnership happening between Accenture and the Digital Dollar Foundation. It began last year to encourage research into one Central Bank Digital Currency (CBDC). CBDCs are the digital form of coins and banknotes, that give the users a direct claim on the central bank digitally. The users can also make electronic payments using these.
Christopher Giancarlo, co-founder of Digital Dollar Foundation and former chairman of the Commodity Futures Trading Commission said, “There are conferences and papers coming out every week around the world on CBDCs based on data from other countries. What there is not, is any real data and testing from the United States to inform that debate. We’re seeking to generate that real-world data.”
Debit cards and payment apps, also being a part of the digital cash, are not backed by the government entirely. Commercial banks created these transactions considering the money central banks deposit to these accounts. Moreover, these sometimes take a lot of time in the settlement and require fees. Cryptocurrencies on the other hand are governed by private entities.
As a result, central banks across the world including Europe and China apart from the US are taking actions to revive these CBDC projects to wave off potential threats from cryptocurrencies. These banks are also in plans to enhance the transaction systems.
The Federal Reserve of the US, being the protecting body of the prevalently used currency in the world, is getting ahead cautiously working alongside the Massachusetts Institute of Technology (MIT). It plans to develop a technology platform for a hypothetical dollar.
However, Chairman James Powell stated previous week that it is crucial to get the right digital dollar instead of fastening the process. Giancarlo agreed to Powell’s statement that it is right to be careful.
Giancarlo added that since China gets ahead, the US needs to drive a discussion about adding the United States’ values of freedom and privacy to commerce into the CBDCs’ improvement. He added that the US needs to assert its leadership significantly as the country has technological developments from the past.
Accenture has already worked on several CBDC projects for Singapore, Canada, and France. The company’s managing director said that these CBDCs would co-exist along with other forms of money instead of replacing them.
Three of the five pilot programs would begin in a couple of months. These will adjunct the Federal Reserve’s MIT project by producing data from sociological, functional, business benefits, and others. However, the information is yet to be released publicly.