MIT and the Fed publish white paper on the digital dollar

The Federal Reserve Bank of Boston and the Massachusetts Institute of Technology (MIT) presented a white paper and open-source CBDC as part of the first phase of examining its potential issuance.

The Hamilton project was undertaken for about two years. The documents were made publicly accessible and open for comments from interested parties via an online form.

The CBDC code envisions:

• No intermediaries or fees, with the caveat that policymakers may change these parameters;
• A full transaction history;
• A throughput of 1.7 million TPS;
• Finalization of transactions within two seconds.

There remain many unresolved issues in determining whether and how to implement a Federal Reserve payment system for the United States. Open-source software provides an important means of collaboration, experimentation and deployment, said Neha Narula, director of the MIT Digital Currency Initiative.

In the second phase, researchers will study alternative technical solutions to improve the CBDC’s scalable research model developed in the previous stage.

Specifically, researchers will test previously unexplored designs and features, and assess possible trade-offs.

Security and programmability will be prioritized. Researchers will also consider ways to balance privacy concerns with the need to comply with requirements, the technical roles of intermediaries, and resilience to attacks.

Earlier in January, the Fed released a report on the digital dollar.

Bank of America later predicted that the dollar’s hegemonic status would be preserved thanks to the CBDC issuance.

Subscribe to ForkLog’s channel on YouTube!