Authorities have announced a huge step towards the implementation of the US Central Bank Digital Currency (CBDC). According to the Digital Dollar Project (DDP), a Technical Sandbox Program is set to begin in early October as part of its exploration of this project. As stated in the release, DDP participants and financial service providers will find it a collaborative space to evaluate its technological, business, and policy approach to the project. Jennifer Lassiter, executive director of The Digital Dollar Project believes that the Technical Sandbox Program would be a huge effort in assembling the public and private sectors as it explores the CBDC.
“We understand how important it is to include a diverse set of views and expertise as we look to answer key questions about how the technology could work, the problems we hope to solve, and the ultimate business and individual outcomes we want to achieve. The marriage of these sectors in our collaboration is essential and will lay the foundation for robust pilots that improve the outcomes and usability of CBDCs,” said Lassiter.
It is important to note that the DDP is meant to provide all stakeholders a bigger picture of what the CBDC implementation would look like, as well as provide the necessary answers to questions concerning the implication of the implementation across retail, wholesale, and international use cases.
According to the release, the DDP Technical Sandbox Program would consist of two phases. The first is the education phase, and the second is the pilot phase. The education phase would see partners and participants coming up with business and functional understanding of the technology. Not just that, they will also evaluate the possible design choices.
In a bid to gather data on business-level impact, the partners and participants will identify and test specific CBDC use-case hypotheses in the Pilot phase.
“The results of which will focus on answering critical questions around the impact of a potential US digital dollar. Our Technical Sandbox Program offers the perfect environment to test CBDC hypotheses in a neutral setting with real-world problems for consideration,” said Lassiter.
CBDC is expected to solve the volatility issues of exchange-traded crypto products like Bitcoin and would reduce the risk of using digital currencies in their current forms.