The U.S. is One Step Closer to a Digital Dollar
The Federal Reserve has been working to develop a U.S. version of a central bank digital currency (CBDC) that could be used in place of the paper dollar. The Boston Fed and the Massachusetts Institute of Technology (MIT) released the initial findings from research on a U.S. digital dollar last week.
According to the report, the CBDC designed by the Fed would be capable of processing 1.7 million transactions per second. However, the digital dollar still has a long way to go.
"There are still many remaining challenges in determining whether or how to adopt a central bank payment system for the United States," Neha Narula, director of the Digital Currency Initiative at MIT told Forbes. "What is clear is that open-source software provides an important way to collaborate, experiment, and implement. In addition to supporting collaboration, monetary systems benefit from transparency and verifiability, which open-source offers."
Research is ongoing, and it could take five years before a digital currency is officially introduced in the U.S., NPR reports. But that would leave room for other countries to move ahead into the paperless world first.
"All told, around 100 countries are exploring CBDCs at one level or another. Some researching, some testing, and a few already distributing CBDC to the public," said Kristalina Georgieva, managing director of the International Monetary Fund Atlantic Council during a speech.