After the digital Yuan’s announcement, the crypto-enthusiasts have been anticipating the emergence of the digital dollar. It has been made official that the US state of Boston has completed its preparation to launch the first digital dollar in markets in the ongoing year. According to a new report published in Bloomberg, the Federal Reserve Bank of Boston has teamed up with the researchers and developers from the Massachusetts Institute of Technology (MIT). The report mentions the unveiling and launch of newly developed digital dollar prototypes.
The launch is expected to happen as early as July. The research collaboration was put into effect last year in August. It should be noted that this effort has not yet been endorsed by the Federal government of the United States. This state-sponsored project plans to introduce a digital dollar that would be regulated by the central bank of Boston. Other states could take up this project if the crypto-aficionados show a willingness to switch to centralized digital assets.
The Boston Fed representative, James Cunha, the leading researcher on the project, explained to the media that the project would introduce two different platforms. According to Cunha, users would be able to sell, purchase, store, and exchange digital dollars on both these digital mediums. It should be noted that the digital dollar project would still be launching a prototype and not a tested model for real-life adoption in the coming months.
For the time being, it is unclear if the new digital channels developed by MIT are blockchains or not. As per the media report, this project has the potential to threaten private banks, credit cards, forex exchanges, and even cryptocurrencies. Reports indicate that high-stake financial institutions, investment banks, and Wall Street are not thrilled about this project. However, this project’s future would be decided by the public’s response towards the CBDC.
Is Centralized Digital Currency Feasible?
Thus far, the main scoring point for massive market penetration of digital currencies had been an effective hedging potential against monetary devaluation. The general impression in the market is that regulated cryptocurrencies would turn digital assets into partially or completely centralized currencies. The takeaway benefits from DeFi would cease to exist, and it might put off investors’ interest in the digital dollar.
The chairman of Fed reserve, James Powell, thinks that the launch of the digital dollar could be a historical event for central banking systems all over the world. According to his comments, the regulations policies have been put on hold for the digital dollar at the moment. It is obvious that, eventually, legislative authorization would be required for this project, which could mean a Bill presentation in Congress. As per Powell, the State Bank of Boston is not in a hurry to embrace the crypto transition.