As the race against China’s development of its central bank digital currency (CBDC) known as the digital yuan continues, the U.S. Federal Reserve accomplished a feat in testing a design for a U.S. digital dollar that managed to handle 1.7 million transactions per second.
A report released provided the initial findings of research conducted as a collaboration between the Boston Fed and Massachusetts Institute of Technology (MIT).
Dubbed ‘Project Hamilton’, the report describes a theoretical high-performance and resilient transaction processor for a ‘CBDC ‘that was developed using open-source software called ‘Open CBDC’.
*Chart by:The Economist
According to the Fed’s Report, a core processing engine for a ‘hypothetical general purpose’ CBDC was created that produced one code base capable of handling 1.7 million transactions per second.
- According to the Fed, the vast majority of transactions reached settlement finality in under two seconds.
“It is critical to understand how emerging technologies could support a CBDC and what challenges remain” said Boston Fed Executive Vice President and Interim CEO Jim Cunha.
“This collaboration between MIT and our technologists has created a scalable CBDC model that allows us to learn more about these technologies and the choices that should be considered when designing a CBDC.”
But speed and tech aren’t the only issues.
The debate over the creation of a digital dollar will likely focus on many other issues, including “whether or how to adopt a central bank payment system for the United States,”
Neha Narula, director of MIT’s Digital Currency Initiative said.