In this episode of FRT, Jennifer Lassiter, Executive Director of the Digital Dollar Project (DDP), discusses the global development of Central Bank Digital Currencies (CBDCs) and the DDP’s recent White Paper 2.0, titled “Revisiting the Digital Dollar Project’s exploration of a U.S. central bank digital currency.”
This paper follows on the DDP’s inaugural 2020 white paper that urged the U.S. to accelerate consideration of a digital dollar through real-world experimentation.
Jennifer discusses a number of tenets for a digital dollar that are laid out in the paper, shares perspectives on CBDCs’ potential implications for financial stability and financial inclusion, and lays out the need for global CBDC standards. She addresses the importance of privacy, asserts that privacy and security are not binary, and touches on DDP’s U.S. CBDC pilot completed in partnership with the Depository Trust & Clearing Corporation (DTCC).
The White Paper offers three high-level recommendations to the U.S. government and U.S. private sector:
1. The U.S. government should increase investment and activity in researching and exploring the benefits and challenges of a tokenized digital dollar, including leveraging transparent and innovative public-private partnerships to reimagine the potential “rails” of such a system and evaluate solutions to preserve all forms of privacy while balancing security needs.
2. The U.S. government should provide leadership in international digital currency standards setting, regardless of whether it decides to deploy a digital dollar.
3. The U.S. private sector – including U.S. commercial entities operating in foreign jurisdictions and policy-based academic and non-profit institutions – must understand and consider the strategic and operational impacts of rapidly progressing CBDC deployments abroad.