Fed Visualizes Digital Dollar That Can Make 1.7M Transactions Every Second

A new form of currency may be arriving soon. And like most innovations today, it’s going to be digital. 

This is known as a central bank digital currency (CBDC), and China has been prolifically developing its digital yuan, with the US Federal Reserve aiming to create something similar with the US dollar, per Forbes.

Project Hamilton, as named by the Boston Fed and MIT, has been showing promising results so far. A report dated Thursday indicates that a core processing engine for the hypothetical CBDC was capable of handling 1.7 million transactions per second in one of two tests to date, reaching settlement finality in less than two seconds.

The OpenCBDC software, as well as other software that will be used in the research, is said to be released publicly under the MIT open-source license. 

Protocol reports that the group has emphasized that—although time and effort has been put into this endeavor—it’s not to say that the US should, or will definitely implement, a digital dollar. It’s more of a statement to say that if the country wanted to, it theoretically could. 

Privacy and the potential for tracking every dollar is a concern with this new form of currency, as well as issues like money laundering.

Project Hamilton, however, has attempted to alleviate these concerns by stating that OpenCBDC is “intended to be a rigorous privacy-preserving tool that does not leak unnecessary information to third parties.” 

So far, research has been in Phase One. Now, in Phase Two, the Boston Fed details that the two collaborators will be building upon the initial model of OpenCBDC to allow for more flexibility in design. 

This will reportedly take policymakers one step closer to implementing an actual CBDC, if it actually does happen.

[via Forbes and Protocol, image via the Federal Reserve Bank of Boston]