The Digital Dollar Project
Exploring a US CBDC
May 2020 2 THE DIGITAL DOLLAR PROJECT Table of contents
The road to a US digital dollar 3 What is the Digital Dollar Project? 3 Introduction 5 CBDC explanation 7 Introduction to CBDC 7 Enablement: tokenization 10 The value case for a tokenized digital dollar 11 Taxonomy 14 Benefits of tokenization 17 Privacy 20 Configurable design choices and options 21 Benefits of a CBDC in the context of a US dollar 24 Understanding the role of the dollar in the global economy 26 Improvement in the future utility of the dollar 28 How a digital dollar supports a key Federal Reserve System objective 29 The dollar remaining as the world’s premier reserve currency 31 Unlocked opportunities with a digital dollar 32 Use cases 33 Conclusion 35 Next steps 36
APPENDIX Domestic payments 37 Peer-to-Peer (P2P) Payments 37 Domestic Retail Payments (Consumer) 38 Domestic Retail Payments (Business) 39 Delivery Versus Payment (DvP) 40 International payments 41 Remittance Payments 41 Cross-Border Payments 42 Government payments 43 Government Benefit Administration 43 References 45
ABOUT THE AUTHORS 49 ACKNOWLEDGEMENTS 50 3 THE DIGITAL DOLLAR PROJECT The road to a US digital dollar
What is the Digital Dollar Project?
The Digital Dollar Project (Project) is a partnership between the Digital Dollar Foundation (Foundation), a not-for-profit organization, and Accenture (NYSE: ACN) to advance the exploration of a central bank digital currency (CBDC)—or a “digital dollar.” The purpose of the Project is to encourage research and public discussion on the potential advantages of a tokenized dollar, convene private sector thought leaders and actors, and propose possible models to support the public sector as it considers development, testing, and adoption of a CBDC.
The Project seeks to advance the public interest by future-proofing the dollar for consumers and institutions across both domestic and global economies. Given the US dollar‘s status as the world’s primary reserve currency and exploration of CBDC by other national governments and stakeholder organizations, the Digital Dollar Project sees piloting a US digital dollar across a range of use cases as a critical and prudent initiative for the United States to begin now. The Project views the infrastructure underpinning the US dollar as a critically important public good and believes that upgrading this infrastructure will provide current and future generations enhanced flexibility, optionality, stability, and prosperity.