Will the digital dollar ever flood the market? The project is in the testing stage. Several international banks and payment organizations will participate in an experiment on the digital dollar, the New York Fed (Federal Reserve Bank), which is coordinating the test which will last 12 weeks, announced on Tuesday. It aims “to explore the feasibility of an interoperable central bank digital currency network,” the New York Fed said in a statement.
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The US central bank (Fed) has been working on the subject for years, particularly concerned about the risks associated with a digital dollar.
In detail, this experiment is to test “the technical feasibility, the legal viability and the commercial aspect”, underlined the institution. “This project will be conducted in a test environment and will only use simulated data. It is not intended to advance a specific outcome, nor to signal that the Federal Reserve will make any imminent decisions” on the subject, it is specified.
A project on “the future of money”
Several major international banks and financial organizations are participating in this experiment, including Citi, HSBC, Wells Fargo and Mastercard.
The Fed had, in March, been instructed by the Biden administration to study the steps that would be necessary to set up this central bank digital currency.
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Faced with the global rise of cryptocurrencies such as Bitcoin and the growing use of digital payments, US President Joe Biden had indeed signed a decree in March asking the Ministry of the Economy to submit to him within six months a report on “the future of money”. He has in fact received nine, which advocate continuing work on the subject.