US Regulators Explore Considerations for Central Bank Digital Currency
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.
Related Links
- 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
Previous Article
PRA Proposes to Amend Own Funds Rules Under CRRRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.