The U.S. nonprofit organization’s (U.S.) Digital Dollar Project today announced that they will launch five pilot programs in the next 12 months to test the potential use of U.S. central bank digital currency.
The private project will be funded by Accenture Plc and involve several finance companies, retailers and NGOs. The purpose is to gather more information for policymakers to weigh in on developing the digital dollar.
A collaboration between Accenture and the Digital Dollar Foundation, the Digital Dollar Project was created last year to promote research on the U.S. central bank’s digital currency. (CBDC).
According to Christopher Giancarlo, former head of the Commodity Trade Commission and co -founder of the Digital Dollar Foundation, conferences and papers continue to be published almost weekly around the world on the CBDC. However, there is not much data and explicit testing for CBDC. Therefore, the objective this time is to get information on the matter.
CBDC is a cryptocurrency or digital currency issued by a central bank and allows consumers to make electronic payments directly.
Although the debit card or payment application is in the form of digital cash, the transaction is executed by the commercial bank based on the money that the central bank credited the money to the bank account. Thus it can take quite a long time to do a large amount of money transaction. In contrast to cryptocurrencies that allow transactions to be done with minimal cost and fast.
Thus central banks around the world, including in China and Europe are developing CBDC projects to leverage blockchain technology and fend off threats from cryptocurrencies and improve payment systems.
David Treat, a senior managing director at Accenture, says the CBDC will co -exist with other forms of physical and electronic money, rather than replace it.
