The Federal Reserve Bank of Boston has become, by the decision of the US Federal Reserve, the main state platform that conducts active research as part of the project to create the digital dollar as a sovereign cryptocurrency (CBDC). Boston FBI completed the main phase of CBDC testing this month with the Massachusetts Institute of Technology (MIT) and is now starting platform selection.
The Federal Reserve Bank of Boston decided that it would not create its own blockchain for the digital dollar, taking as a basis the already working protocols.
MIT takes an active part in the selection procedure; a group of scientists will have to conduct “in-depth studies” of the code of the selected protocols from 30-40 candidates. According to the Federal Reserve Bank of Boston, it will take two years to launch the first CBDC prototype, and even the programming language and interface issues have not yet been resolved.
The Fed has so far decided only on the basic design – the second level solution will issue tokens that will go to banks with the right to access the network. They, in turn, will provide distribution, acceptance of payments, and circulation of digital dollars on the public blockchain.
It is not yet clear how cross-border transactions and KYC / AML procedures will be structured. The task is to select a blockchain and develop basic technical algorithms. These studies will appear in the public domain, but so far, the Boston Fed is not ready to give a timeline.
