Countries are ramping up efforts to develop central bank digital currencies (CBDCs). They are sometimes doing so with the help of some leading companies in their countries. Accenture is set to carry out CBDC trials over the next year.
Accenture to conduct five CBDC trials.
Fortune 500 company Accenture will work with the Digital Dollar Foundation to conduct CBDC trials in the United States over the coming twelve months. The partnership was announced yesterday, and the duo would conduct five tests over the next year.
According to the announcement, the private-sector pilots would be initially funded by Accenture Plc. The trials would involve financial firms, retailers and non-profit organizations, and others. The pilots aim to generate data that would help US policymakers design and develop a digital dollar.
The report said
We intend to highlight how a US CBDC (a digital dollar) could address some common challenges faced by different stakeholders, including consumers, businesses, financial institutions, and fintech. These examples are illustrative of challenges met and opportunities that can be explored with a US CBDC were testing the merits of such a solution either against or as a complement to other solutions would be sound national policy.
The partnership, called the Digital Dollar Project, was first created in 2020 to promote research into a US CBDC. Christopher Giancarlo, former chair of the Commodity Futures Trading Commission (CFTC) and co-founder of the Digital Dollar Foundation, stated that research papers and conferences are coming out every week in various parts of the world regarding CBDCs. However, he added that what is lacking is ideal data and testing from the United States to contribute to the debate. Hence, the job of the Digital Dollar Foundation is to generate that real-world data.
Several countries are already researching and developing their CBDCs. China is already live-testing the digital currency to see how it performs in the real world. However, the paper pointed out that the US Fed is taking a cautious approach regarding CBDCs as it is the guardian of the world’s reserve currency. Although Fed Chair Jerome Powell is suitable to be careful, Giancarlo said the US is at risk of falling further behind China, which has already reached an advanced stage in development and issuance. “It’s vital that the US asserts leadership as it has in previous technological innovations,” Giancarlo added.
CBDC developments are sweeping across the globe
Several central banks globally are actively researching ways to develop CBDCs or have already begun. The need for CBDCs arose following the rise of stablecoins. Facebook-backed Libra project faced criticisms in several parts of the world. However, Libra and other stablecoins opened the eyes of regulators to the need to develop CBDCs as central banks have fallen behind private institutions in the digital world.