"Digital Dollar" latest details: or similar to the central bank's digital currency

Source: Digital Fiat Research Institute

At the World Economic Forum in Davos, Christopher Giancarlo, a former chairman of the US Commodity Futures Trading Commission (CFTC), revealed more details about the recently launched Digital Dollar Project. He The reason why the project was initiated was because the currency circulation of the US Central Bank is still limited to local circulation, and there are many restrictions on its functions.

Christopher Giancarlo explained:

"The Digital Dollar Project seeks to encourage the next major innovation in the U.S. dollar: the tokenization of fiat currencies issued by the Federal Reserve System. This is a new form of digital figures in U.S. dollars that co-exists with traditional fiat currencies, banknotes, and reserves, and is endorsed by the U.S. government The full belief and credibility of the currency of the Central Bank. "

Christopher Giancarlo has 35 years of experience in the US financial market. He served as the chairman of the US Commodity Futures Trading Commission from 2014 to 2019. After leaving office, he joined a private company to optimize slow, expensive and Uncertain traditional money transfer system. Christopher Giancarlo added:

"The traditional remittance process is very slow. Currently, more than two-thirds of central banks have begun researching new payment systems, including tokenized payment systems."

According to Christopher Giancarlo, the digital dollar will become the Fed's liability and form part of the monetary base, while maintaining the effectiveness of monetary policy and financial stability, and ensuring the forward-looking nature of currency innovation. In addition, Christopher Giancarlo also mentioned that digital dollars will comply with existing KYC / AML requirements for distribution through regulated payment intermediaries and banks, which appears to be a model from The central bank's digital currency from the People's Bank of China has "drawn from". Global central banks start paying attention to central bank digital currencies

In fact, due to the gradual shrinking of the international liquidity of the US dollar, motivation, geopolitical pressure, and intergenerational preferences, many countries have begun to use other methods to replace the US dollar as an international payment medium. On these issues, Christopher Giancarlo focused on the Bank of England-Bank of England's recent news at the World Economic Forum in Davos: They have decided to form an alliance with the central banks of five other countries to explore the central bank together. Digital currency use cases, these five central banks are: the Bank of Canada, the Bank of Japan, the European Central Bank, the Swiss National Bank and the Swedish Central Bank.

It is worth mentioning that Christopher Giancarlo seems to appreciate the efforts of private companies to explore digital currency innovation. He also specifically mentioned the digital currency project "Libra" supported by Facebook, as well as Goldman Sachs, JP Morgan and Digital currencies launched by companies such as Wal-Mart. Christopher Giancarlo continued:

"The development of digital currency projects developed by these private companies is very important because they help promote innovation and give us a new and clearer view of currency, especially the role of traditional analog fiat currencies in the new digital economy. . "

On January 17, Christopher Giancarlo announced that he and Daniel Gorfine, the chief innovation officer of the U.S. Commodity Futures Trading Commission, jointly launched a non-profit organization, the Digital Dollar Foundation, to promote a digital Tokenize the U.S. currency, which will coexist with other Federal Reserve debt and serve as a settlement medium to meet the needs of the new digital world and a cheaper, faster, and more inclusive global financial system. Christopher Giancarlo believes that the digital dollar will help adapt the dollar to future developments and allow individuals and global businesses to pay in dollars without time and space constraints.

In fact, the digital dollar has roughly a design framework. Eventually, a clear central bank digital currency solution will be found. This solution can not only enhance the effectiveness of monetary policy and financial stability, but also can be used in retail, wholesale and international payments. Provides the required scalability, security, and privacy, and supports integration with existing financial infrastructure.

Christopher Giancarlo specifically noted that digital dollars will be distributed to end users through commercial banks and "trusted" payment processors. From the proposed design framework, the digital dollar model seems to be very similar to China's central bank digital currency, which also allocates "digital yuan" to commercial banks, and then allows users and businesses to register digital wallets in these commercial banks.

Christopher Giancarlo revealed that digital dollars will serve the digital financial market infrastructure, while expanding the scope, use, diversity, and flexibility of dollar payments, and supporting retail, wholesale, and international payment use cases.

However, Christopher Giancarlo acknowledged that digital dollars also need to face problems such as money laundering. Although these problems may be mitigated through the US banking system to guide digital dollars in the future, offshore digital dollars may require more “extra protection”.

Christopher Giancarlo concluded:

"As other digital currencies become more attractive to people, the status of the U.S. dollar may be challenged. The adoption of digital dollars in the United States will help alleviate these problems, and it is essential to support a stable international currency mitigation."