Think tank launches 'technical sandbox' exploring US CBDCs

The Digital Dollar Project's Technical Sandbox Program is scheduled to begin in October, with the goal of providing a better understanding of the ramifications of a CBDC to states -United.

A US think tank has launched a “technical sandbox” aimed at advancing exploration of a possible US central bank digital currency (CBDC).

In a Wednesday tweet from the Digital Dollar Project (DDP), the organization said the new program would explore “technical and business implementation” issues regarding a US CBDC.

The organization noted that early participants in the sandbox include crypto company Ripple, fintech company Digital Asset, software platform Knox Networks, and banking solutions company EMTECH.

The Sandbox Technical Program is intended to give the federal government, policymakers, and the private sector a better understanding of how a potential CBDC would be deployed.

This includes potential implications for retail and wholesale and international use cases such as cross-border payments.

The US Federal Reserve has yet to decide whether or not it will implement a CBDC, but has explored the potential risks and benefits that come with it.

On January 20, she released a discussion paper examining the pros and cons of CBDCs, but omitted any guidance on her future plans.

The paper suggests CBDCs could act as a digital currency free of credit and liquidity risk, improve cross-border payments, help preserve US dollar dominance, promote financial inclusion, and expand public access to the secure currency of the central bank.

Potential risks detected...