In the United States, focus on the central bank digital currency issues has increased. The U.S. Board of Governors of the Federal Reserve System (FED) published an article on security considerations for a central bank digital currency (CBDC) while the Congress published a report examining policy issues associated with the digital currency. Additionally, the Federal Reserve Bank of Boston (Boston FED) and the Digital Currency Initiative at the Massachusetts Institute of Technology (MIT) released its open-source code, set of frequently asked questions (on this Project), and research in the form of a whitepaper that sets out findings of the initial technological research on central bank digital currency. This collaborative effort, which is known as the Project Hamilton, focuses on technological experimentation and does not aim to create a usable currency for the United States.
The published research describes a theoretical high-performance and resilient transaction processor for a CBDC that was developed using open-source research software, OpenCBDC. The paper on the Phase 1 of the Project Hamilton notes that the
- team met its goal of creating a core processing engine for a hypothetical general purpose CBDC and explored it in two architectures.
- work produced one code base capable of handling 1.7 million transactions per second.
- vast majority of transactions reached settlement finality in under two seconds within architectures that support secure, resilient performance and offer the significant technological flexibility required to adjust to future policy direction.
The Boston FED and Digital Currency Initiative at MIT announced the Project Hamilton collaboration in 2020. The first phase of the project produced the research and code for a high-performance transaction processor. The code is the first contribution to OpenCBDC, a project maintained by MIT, which will serve as a platform for further CBDC research. Project Hamilton aims to inform future contributions to the code and inform policy discussions about CBDC. In the coming years, the second phase of this partnership will allow Project Hamilton to explore alternative technical designs to improve the already robust privacy, resiliency, and functionality of the technology outlined in the first phase.
- Congress on Policy Issues
- FED on Security Considerations
- Boston FED Research Findings
- Boston FED Whitepaper (PDF)
- FAQs on Project Hamilton (PDF)
Keywords: Americas, US, Banking, CBDC, Digital Currency, DLT, FAQ, Project Hamilton, Regtech, Boston FED, FED
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