The new line of research has caused a conflict at the DCI because many researchers are interested in cryptocurrencies because they eliminate the need for banks or government monetary bodies. Narula has found a way to bring people who are interested in cryptocurrencies to the table with central bankers to talk about what lessons they might have for the design of a bank-backed digital currency.
Narula sees a different world than the one she is in.
It's not always easy, says a strategic advisor.
She was worried that the technology might not be salvaged after she began researching it.
Narula told Frank that much of the toxicity of cryptocurrencies was due to a failure to predict the most negative outcomes. Narula says that we can use what we learn from the mistakes that were made in the design of new digital currencies to serve people better.
Narula says that her team can answer fundamental questions about other types of cryptocurrencies. She says it should be possible to design aCBDC to work for those who are the most disadvantaged. It could help cut the red tape around social support programs or eliminate fees that people without bank accounts have to pay to access their cash.
Project Hamilton's design for a payment processor that can handle 1.7 million transactions per second seems to have paved the way for the US to launch aCBDC. In March, President Joseph Biden issued an executive order to increase research into the financial technology field.
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Biden expects a technical evaluation of what will be needed to design a CBDC to come out by September, and Project Hamilton will inform that policy. Narula says the group recently began advising other countries onCBDCs as well as the US. There are still unanswered questions when it comes to adoption.
Ensuring that it protects user privacy is Narula's top concern for any new digital currency. She is watching what happens with China'sCBDC, which has already been used to conduct billions of dollars in transactions. China could eventually link it up to the country's social credit system, which uses citizens' financial data to score their trustworthiness, and allow the government new levels of control, according to experts. It might be possible to deny citizens access to their own money in response to their social media posts.
No one knows what will happen. She wants to understand the implications of different technology designs, so she will be by the sign.
Ashley Belanger is a freelance science journalist based in Chicago.
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