The Federal Reserve Bank of New York State has recently reported that it has completed experiments on the deployment of digital dollars. The Central Bank established a dedicated department to get this work done. The reports suggest that the digital dollar can be used for completing complex foreign exchange tradeoffs.
Furthermore, all the digital dollar transactions are going to happen on a network of blockchain projects. The Fed has managed to test digital dollar usage for tasks like wholesale transactions, cross-border payments, and US currency exchanges on a series of different blockchain networks. The project has been named Cedar, and it has wrapped phase one experiments successfully.
Digital Dollar Project
Under Biden Administration, the Federal Reserve has made some difficult decisions. The Central Bank has dealt with the financial crisis in the form of a COVID onslaught. On the other hand, the entire Western block is now dealing with war, recession, and oil shortage. Despite these economic setbacks, the Federal Reserve has maintained its stance on the digital dollar project.
It is interesting to note that China and the CCP have been eager to introduce the eCNY or digital Yen project for the last two years. However, the US government neither denied nor put extensive stress on the introduction of a digital dollar. Fed chair Jerome Powell maintained that the government had not dismissed the CBDC project.
Depending on the magnitude of the transaction, digital dollar testnet has reportedly conducted a transaction within 15 seconds to 2 days. The developers have dubbed it the atomic-level transaction speed that is going to beat all the previous records of international payment settlements.
In addition to the USA, European Central Bank has also taken a keen interest in the digitization of its legal tender. For the time being, the New York Fed has claimed that the results are not conclusive. However, it has whisked a new wave of optimism in the cryptocurrency market by introducing practical and highly inductive usage of blockchain technology and mainstream adoption.