Several countries are considering switching from a physical currency to a digital one, and the US seems ready to provide details on how a “digital dollar” would work. Unlike “standard” cryptocurrencies, the digital dollar will be issued by the US Federal Reserve, the project being carried out by researchers at MIT, the world’s most prestigious technology university. But the most important thing is the ability of the currency to be traded, ensuring a transaction speed of only 2 seconds.
US could adopt “digital dollar”
MIT Digital Currency Initiatives and the Federal Reserve Bank of Boston have revealed new information about the digital dollar they are working on. It will be based on the open-source project CBDC and will allow fast transactions, unlike today’s cryptocurrency transactions, which are both expensive and slow in some blockchains.
The digital dollar should allow 1.7 million transactions per second, with each payment being processed in two seconds. Trading services should operate 24 hours a day, 7 days a week, without the possibility of the system being offline. The project initiated by the US Federal Reserve promises that the technological limitations of the CDBC project have been overcome, but the project is flexible enough to accommodate the policies adopted by the authorities.
In practice, those who do not now benefit from banking services and work only with cash, could continue with the digital dollar to continue not to use banks, but to be able to send money more easily to other people, or to shop online or abroad.
There are also some issues that have not been resolved yet. Such as the confidentiality of data and transactions, as well as the ability to trade the digital dollar for foreign exchange. However, the project is fairly new, with work only starting in May of the previous year.
A digital dollar, compared to cryptocurrencies, is controlled by the state, so its value cannot vary and be affected by various external factors, as in the case of cryptocurrencies. China has already started the digital yuan for several years.