Boston Fed's first look at digital U.S. dollar nearly done, official says

FILE PHOTO: A U.S. dollar banknote is seen in this illustration taken May 26, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) – The first phase of a multi-year research project the Boston Federal Reserve is doing with the Massachusetts Institute of Technology on the technology that could be used for a digital dollar is nearly done and could be released over the next month or so, a Boston Fed official said on Wednesday.

The research, dubbed “Project Hamilton,” will look at the technical challenges that need to be addressed when building a central bank digital currency, or CBDC and is separate from a discussion paper the Fed board is expected to release soon examining the policy questions surrounding a digital dollar. Both papers were initially due to be released over the summer.

The initial findings from the Boston Fed research will include open-sourced code that could serve as a potential model for a U.S. CBDC and will also focus on the system’s ability to handle a high volume of transactions, said Jim Cunha, a senior vice president with the Boston Fed, during a virtual panel focused on payments.

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