Boston Fed, MIT end CBDC research project

Dec. 23, 2022

The Federal Reserve Bank of Boston and MIT concluded their joint Project Hamilton research project into the technical feasibility of a potential U.S. central bank digital currency.

Overview: Boston Fed Executive Vice President Jim Cunha said the project was “agnostic” about any future policy decisions regarding a U.S. CBDC. Instead, the project focused on better understanding the capabilities and limitations of different technologies that might be used to manage and transfer CBDCs, he said.

Project Details: The Project Hamilton research describes a theoretical transaction processor for a hypothetical general-purpose CBDC and is separate from the Federal Reserve Board's CBDC evaluation. The Fed previously issued a separate discussion paper evaluating the pros and cons of developing a U.S. CBDC.

ICBA Position: ICBA opposes the creation of a U.S. CBDC, arguing that it would disintermediate community banks and pose privacy risks without improving on superior payment alternatives, such as FedNow. ICBA in September released polling conducted by Morning Consult indicating consumers support a regulatory framework for digital assets and are skeptical of the creation of a U.S. CBDC.