5 Highlights From The Digital Dollar Project’s May Report “Exploring a US Central Bank Digital Coin”

On May 29, 2020, the Digital Dollar Project published a 50 page white paper “Exploring a US CBDC.” The purpose of the Project is to encourage research and public discussion on the benefits and risks of a tokenized dollar, and to propose possible models to support the government as it works to develop, test, and deploy a CBDC. The Project is headed by Chris Giancarlo, former Chair of the Commodity Futures Trading Commission (CFTC) in partnership with Accenture.

The white paper delved in to the foundational elements of CBDCs and the tokenization process generally, before making the case for a tokenized digital dollar. Below are five highlights from the report that are key to understanding the benefits and importance to the United States of a timely deployment of a CBDC:

1. Tokenization can provide a new level of portability, efficiency, programmability, and accessibility, ensuring the tokenized digital dollar’s ability to complement existing formats of money while simultaneously modernizing our payment and financial infrastructure.
2. Rather than being a defensive measure, tokenization of the US dollar should be viewed as a proactive opportunity to enhance the technological infrastructure underpinning our currency to future-proof its role in the global economy.
3. If the US dollar is to remain the world’s primary reserve currency in the unfolding century, it cannot remain an analog instrument and unit of account for things increasingly denominated as digital tokens. It must itself become a digital tokenized currency that measures, supports, and transacts with the world’s digital tokenized things of value.
4. The programmable and customizable aspects of digital currencies could enable the private sector to offer varying privacy customizations, data ownership controls, transaction and treasury management efficiencies, and financial accessibility.
5. Exploring a well-architected, durable, and universal digital dollar is in the national interest. Successfully creating it is an enormous undertaking and needs to be done carefully, thoughtfully, and deliberately. Something as complex and worthy of the US dollar’s global importance should not be completed in a hurried manner. It will take time to get it right. Nevertheless, now is the time to get started.

As has been widely reported, China is well ahead in terms of deploying a CBDC. To better understand where China is, our next “Stablecoins Are Killing It”, on Thrusday, June 11th, from 1pm-2pm EST, features Dr. David Zhou, Chief Economist of Wanxiang Blockchain & Associate Research Fellow of The People’s Bank of China (since 2014), where he works developing China’s CBDC. To register for that call on Zoom, click here

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