On May 28, Digital Dollar published its white paper, a 30-page document that describes the possible applications of a CBDC. This document continues the work of the new group of experts push the development of a digital dollar.
The design and principles of the new white paper
The document details certain basic principles of what you see as the digital dollar and what will drive the initiative.
The Digital Dollar Project was founded by former heads of the Commodity Futures Trading Commission (CFTC) and the company for professional services Accenture. One of these founders is Daniel Gorfine, who headed the CFTC’s finance technology office until last fall.
Gorfine told Cointelegraph: “We are trying to catalyze measures through the Digital Dollar Project, and this document is a crucial step in that direction.” The new document Express interest de Gorfine and CFTC co-founder and former President J. Christopher Giancarlo, to cooperate with traditional financial authorities and existing payment mechanisms, including automated clearing house money and technology.
Try a new technology
The article presents a impressive range of applications for the digital dollar, For example, the colossal transfer corridor between the United States and Mexico. Search also eagerly future pilot programs to attempt these uses as separate components:
“By working with stakeholders, the public sector, and our advisory group, our goal is to further refine these use cases and identify potential drivers to test value hypotheses and make design decisions.”Gorfine stressed the importance of dividing the wide range of tasks that a digital dollar should optimize and spoke about the pilot tests:
“The tests can be performed on different parts or parts related to the general topic. For example, we could investigate tokenization and its impact on financial inclusion and access. We could also examine government performance programs separately and find out how money can be sent to individual recipients. “
Centralization and data protection
In line with the request of the project work within the existing legal limits, expressly it is not trying to change the current American monetary system. He mentioned several times the maintenance of the currency format, which resulted from the Federal Reserve (Fed) to financial institutions and then to the public:
“A digital dollar will be distributed across the existing two-tier architecture of commercial banks and regulated intermediaries.”
Although some recent laws have asked for direct access From consumers to Fed accounts, Gorfine partially explained the structure proposed by the Digital Dollar Project Decentralization efforts::
It seems a much better approach to rely primarily on the private sector and regulated banks and money transmitters. Public solutions would only make sense if there were still gaps and problems to be solved. […] When you think about how the Fed has developed, it has tried to decentralize the federal banking system and political decisions. “
In the same way, For white papers, every digital dollar must work within existing requirements from Know Your Customers (Know-Your-Client, KYC) Anti-money laundering (Anti-Money Laundering, AML). At the same time, the project’s founders have repeatedly listed privacy as their main concern. This problem not decided yet, based on the fourth amendment and future legislation.
“This is a very important area. Ultimately these are political decisions that the government has to make,” said Gorfine about privacy. “I think what we call the ‘white paper’ is a model that is anchored and based on physical money based. “
The pandemic of COVID-19 sparked many discussions how to reconfigure the financial system so that be more agile including various politicians who are demanding a digital dollar.