The U.S. nonprofit Digital Dollar Project said Monday it will launch five pilot programs over the next 12 months to test the potential uses of a U.S. central bank digital currency, the first such effort in the United States.
Private sector pilots will initially be funded by Accenture Plc and involve financial companies, retailers and NGOs, among others. The goal is to generate data that can help U.S. policymakers develop a digital dollar.
The Digital Dollar Project, a partnership between Accenture and the Digital Dollar Foundation, was created last year to promote research into a digital currency of the US Central Bank (CBDC).
“There are conferences and communications coming out every week around the world about CBDC based on data from other countries,” said Christopher Giancarlo, former president of the Commodity Futures Trading Commission and co-founder of the Digital Dollar Foundation.
“What is not there is real data and evidence from the United States to report this debate. We are looking to generate this data from the real world,” Giancarlo added.
CBDCs are the digital equivalent of banknotes and coins, giving holders a direct digital claim to the central bank and allowing them to make instant electronic payments.
While debit cards or payment applications are a form of digital cash, these transactions are created by commercial banks based on the credit of central banks ’money in the accounts of these banks. They are not fully supported by the government, can take days to settle and often incur fees. Meanwhile, cryptocurrencies are controlled by private actors.
Central banks around the world, including in China and Europe, are developing CBDC projects to avoid cryptocurrency threats and improve payment systems.
As the guardian of the most widely used currency in the world, the U.S. Federal Reserve moves with more caution. He is working with the Massachusetts Institute of Technology (WITH) to build a technology platform for a hypothetical digital dollar, but President Jerome Powell said last week that it is “much more important” to get a correct digital dollar than it is to be fast.
Giancarlo said Powell was right to be cautious, but that as China moves forward, the United States should lead a debate on incorporating U.S. values such as privacy and freedom of trade and expression into the development of the United States. CDB.
“It is vital that the United States asserts its leadership as in previous technological innovations,” Giancarlo added.
A digital dollar could also increase financial inclusion in the United States, where transaction fees prevent many Americans from accessing major financial services, Giancarlo said.
The pilot programs, three of which will be launched in the next two months, will complement the program PoweredThe MIT project generates data on the functional, sociological, business uses, benefits, and other facets of a digital dollar. The data must be published publicly.
Accenture has worked on several CBDC projects, including in Canada, Singapore and France.
David Treat, CEO of Accenture, said CBDCs would exist alongside other forms of physical and electronic money, rather than replace them.
“It’s not a panacea for all the money,” Treat said. “We will use physical cash and currency for some time.”