Several countries are ramping up efforts to develop central bank digital currencies (CBDCs). They are sometimes doing so with the help of leading companies in their countries. Accenture is set to carry out CBDC trials over the next year in the United States.
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 year. The partnership was announced yesterday. As it happens, the duo will conduct five trials over the next twelve months.
According to the announcement, the private-sector pilots will initially be funded by Accenture plc. The trials will involve the participation of financial firms, retailers, and non-profit organizations among others. Needless to say, the aim of the pilots is to generate data. Thus, this process would help US policymakers design and develop the 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 fintechs. These examples are illustrative of challenges faced, and opportunities that can be explored with a US CBDC where testing the merits of such a solution either against or as a complement to other solutions would be sound national policy.”
More CBDC data is needed in the industry
The partnership, called the Digital Dollar Project, was first created in 2020 to promote research into a US CBDC. Christopher Giancarlo is the former chair of the Commodity Futures Trading Commission (CFTC) and co-founder of the Digital Dollar Foundation. He stated that research papers and conferences about CBDCs are coming out every week in various parts of the world.
However, he added that what is lacking is ideal data and testing from the United States. This would contribute significantly to the debate about cryptocurrencies. Hence, the job of the Digital Dollar Foundation is to generate real-world data.
Several countries are already researching and developing their own CBDCs. As an example, China is currently live-testing the digital currency to see how it performs in the real world. However, the paper pointed out that the United States is taking a cautious approach regarding CBDCs as it considers itself the guardian of the world’s reserve currency.
CBDC developments are sweeping across the globe
Giancarlo said although Fed Chair Jerome Powell is right to be cautious. The US is at risk of falling further behind China. In fact, the chinese government has already reached an advanced stage in development and issuance of CBDCs. “It’s vital that the US asserts leadership as it has in previous technological innovations,” Giancarlo added.
Additionally, several central banks globally are actively researching ways to develop CBDCs or have already begun the process. In reality, the need for CBDCs arose following the rise of stablecoins.
Having said that, the Facebook-backed Libra project faced criticisms in several parts of the world. However, Libra and other stablecoins have opened the eyes of regulators to the need for developing CBDCs. Besides that, central banks have fallen behind private institutions in the digital world.