philip lelyveld The world of entertainment technology

Is the digital dollar dead?

... Three years later, the digital dollar—even though it doesn’t exist and the Fed says it has no plans to issue one—has become political red meat. Tapping into voters’ widespread opposition to government surveillance, a group of anti-CBDC politicians has emerged with the message that the digital dollar is something to fear. ...

Project Hamilton’s goal was to build and test a prototype of just one component of a potential system: a way to securely and resiliently handle the same quantity of transactions that the major payment card networks process. ...

...consumers are simply choosing to use less cash. That’s in part out of convenience, but there’s another big reason: you can’t use cash to buy things on the internet.

In the US, cash payments represented just 18% of all payments in 2022—down from 31% in 2016, according to research by the San Francisco Fed. ...

The Federal Deposit Insurance Corporation estimates that in 2021, 5.9 million US households were “unbanked.” ...

Last year, Grey helped author a US House bill called the Electronic Currency and Secure Hardware Act (ECASH). The legislation, which was introduced by Representative Stephen Lynch of Massachusetts, would have directed the Department of Treasury to create a digital dollar that could be used both online and offline and have cash-like features, “including anonymity, privacy, and minimal generation of data from transaction.” It didn’t make it out of the Financial Services Committee, but Grey says there are plans to reintroduce it this year. ...

According to MIT’s Narula, the collaboration with the Boston Fed “reached a natural end.” But  the Digital Currency Initiative has continued working on the research project formerly known as Hamilton and still hopes to publish some of that work. 

“The only way to really truly understand these types of systems is to build and test them,” she says.

See the full article here: https://www.technologyreview.com/2023/07/21/1076645/is-the-digital-dollar-dead/