| Named after the first Secretary of the Treasury, Project Hamilton is a collaboration between the Federal Reserve of Boston and the Massachusetts Institute of Technology that seeks a better grasp on the challenges and opportunities of a U.S. central bank digital currency. The project has completed its first phase, which focused on the performance and feasibility of resilient transactions.
During the testing, between 170,000 to 1.7 million transactions were processed per second (TPS). While the digital dollar was in test mode, it far surpassed the currency processing speed of China’s digital renminbi, at 10,000 TPS. The future capability of the e-yuan is expected to be 300,000 TPS.
Why a CBDC? CBDCs are being explored across the globe—in the past two years, the amount of countries exploring a CBDC has shot up by 200%, according to the Atlantic Council. And there are varied reactions. In the United States, concerns center around disintermediation and privacy, while in the UK, a recent survey found that over 25% of citizens did not support a CBDC.
However, feedback from emerging countries such as Ghana has been “enthusiastic.” Citizens of these countries struggle with costly and unavailable payment systems.
No immediate need. Or is there? A recent paper by the Federal Reserve Bank of Richmond cited “no immediate need for the U.S. to issue a CBDC,” but did state that the technology should be explored for possible future use. As the overwhelming majority of Americans—94%—have access to banking, reaching the unbanked is not an issue in America.
So what would push the Fed to issue a digital dollar? According to the Richmond Fed, the reasoning would be to future-proof the US payment system against stablecoins and other CBDCs. Recent events might spur the U.S. central bank to move ahead faster than originally planned.
A U.S. CBDC is very much a question of when, not if, it will happen. | 
