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Edited by qqqpeter at 2020-5-31 14:59

On May 28, the Digital Dollar Project released its white paper, a 30-page document detailing potential applications for US CBDC. This white paper continues the fledgling think tank's work to advance the digital dollar.

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The Digital Dollar Project and the Purpose of the New White Paper

This white paper details some of the core tenets of the digital dollar and the direction it will move. The Digital Dollar Project was created by the former head of the U.S. Commodity Futures Trading Commission (CFTC) and professional services firm Accenture. One of the founders is Daniel Gorfine, who served as director of the CFTC's Office of Financial Technology until last fall. He told the Cointelegraph, "We've been trying to drive action on this through the Digital Dollar Project, and this white paper is a key step in that direction." This new white paper expresses Gorfine's and CFTC co-founder and former Chairman J. Christopher Giancarlo's interest in running digital dollars alongside traditional financial institutions and existing payment mechanisms, including cash and automated clearing house technology.

Digital Dollar Project releases white paper, lays the foundation for US CBDC Testing all new technologies

The white paper lists an impressive array of digital dollar use cases, such as the huge remittance channel between the United States and Mexico. It also hopes that future pilot projects will test these use cases as separate components. By working with stakeholders, the public sector, and our advisory group, we intend to further improve these use cases and identify potential pilot projects to test relevant value assumptions and inform design decisions. Referring to the pilot project, Gorfine noted that the range of tasks that digital currencies are expected to simplify is broad and that it is necessary to break down these tasks.

Pilot projects can take place in different segments or formats. For example, you can imagine exploring tokenization and its impact on financial inclusion. You can look at the government's benefit programs and how they are paid to individual beneficiaries separately.

Digital Dollar Project releases white paper, lays the foundation for US CBDC Weighing centralization and privacy

In keeping with the project's desire to work within existing regulation, the project has made it clear that it does not seek to subvert the current monetary system in the United States. The white paper mentions several times the form of keeping money flowing from the Federal Reserve to financial institutions and then to the public: digital dollars would be issued through the existing two-tier architecture (commercial banks and regulated intermediaries). Despite some recent legislation requiring consumers to have direct access to their Fed accounts, Gorfine explained that the proposed structure of the Digital Dollar Initiative is partly aimed at decentralization: relying primarily on the private sector and regulated banks and remitters seems like a better approach. Public solutions only make sense if there are gaps and problems that remain to be addressed. If you think about the way the Federal Reserve has evolved, you'll see that it has long sought to decentralize the federal banking system and related policy-making bodies. The white paper also requires all digital dollars to operate under existing KYC or Anti-Money Laundering (AML) requirements. At the same time, both the white paper and the project's founders have historically mentioned privacy as a central issue. Under the Fourth Amendment and future legislation, this issue remains to be determined.

Commenting on privacy, Gorfine said, "This is a very rich and important area. Ultimately, these are policy choices that governments need to make. I think what we're describing in the white paper is a Champion model that works by anchoring dollars and something like physical cash."

The neo-coronary pandemic has generated a lot of discussion about how to restructure the financial system to be more responsive, including some bills that would require the use of digital dollars.
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