Fed and MIT to unveil digital-dollar prototype by July

The Boston Fed and MIT staff will finish work on a prototype of the national digital currency (CBDC) by July. Bloomberg reports.

The Federal Reserve System (the Fed) began to study such a possibility in February 2020.

The start of development of the digital dollar became known in August 2020.

At the time, the project initiators said they intended to create “a mechanism and software that would meet the needs” CBDC for a country the size of the United States. They would also have to tackle accompanying issues—from the enormous volume of transactions to ensuring security and privacy.

Boston Fed’s James Kunya said that the team he leads would present two platforms capable of moving, storing and settling payments involving the digital dollar. He did not say whether blockchain is used.

The official stressed that the research is aimed at creating a pilot model and does not imply any particular CBDC design.

“We believe it is important not to wait for political debates, as that could delay experiments by a year or more”, — said Kunya.