Saturday, July 13, 2024

Critical To Understand How Emerging Technologies Can Support CBDC

With many governments and central banks looking to have their own CBDCs, it is important to see how new-age technologies can make it better. Jim Cunha, the Boston Fed Executive Vice President, and Interim Chief Operating Officer, believes it is critical to understand how emerging technologies could support a CBDC and what challenges remain.

The Federal Bank of Boston and the MIT through Project Hamilton have created a scalable CBDC research model. It helps them learn more about technologies and choices to be considered when designing a CBDC. Neha Narula, director of the Digital Currency Initiative at MIT, says there are many challenges in determining whether or how to adopt a central bank payment system for the US. She said they are clear that open-source software provides a way to collaborate, experiment, and implement.

Experts acknowledge the fact that monetary systems benefit from transparency and verifiability. This is found in open-source. To understand the risks and benefits of CBDC, Project Hamilton will test the environment from scratch. It will determine the nuanced decisions they pose on the CBDC design.

MIT and the Federal Bank of Boston want the CBDC to support cryptographic payment while offering greater complexity in transfers to multiple sources of funds. A retail CBDC has the potential to deliver beyond what is currently available to consumers with bank accounts or cash. Researchers made a system that is capable of handling 1.7 million transactions per second. They are able to settle the majority of transactions in under two seconds.

Researchers in the first phase of the project had worked on aspects of the design, which ranged from cryptography, blockchain technology, and distributed systems. The institutes wanted to see whether the test platforms would provide ammunition for policymakers.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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