An updated version of “Exploring a US CBDC,” a white paper from The Digital Dollar Project (DDP), became available on January 18. Although the main focus of the project is the United States, it has expanded the study to look at world central bank digital currency programs.
In May 2020, the DDP published the first draft of the document that included its “champion model”, which consists of a wholesale and retail intermediary CBDC. The number of CBDC projects around the world has expanded from 35 to 114 since that time.
The updated DDP document analyzes modern technical developments while maintaining the fundamental principles of the champion model, such as those of privacy and monetary policy.
Warnings from the authors about the US losing ground in CBDC research and leadership dominated the new proposals in the report. Regardless of how the United States ultimately decides to go with a dollar CBDC, the authors state:
“The US government must now investigate strategies to retain the use of the dollar in global digital payment systems and formulate policy related to the use of alternative payment systems.”
DDP Report on CBDC
Christopher Giancarlo, former chairman of the Commodity Futures Trading Commission, founded the DDP in 2020 to support a US CBDC. The organization has run many testing initiatives in collaboration with IT firm Accenture. It launched a technical sandbox in 2022 with Ripple, Emtech and three other companies.
According to a report published by the Federal Reserve in January 2022, it would “only pursue a CBDC within the framework of substantial public and intergovernmental support.” Notably, the Hamilton Project, which has produced two reports and recently proclaimed its mission complete, has kept the investigation in a US CBDC.
