- A lot of talks have emerged on the possibility of the Federal Reserve issuing a digital dollar as part of the $2.2 trillion dollar stimulus package to fight the COVID-19 pandemic being a key turning point in the discussions.
- Now, an Ethereum-based project is accelerating its efforts in the development of a platform that will potentially allow the Fed to directly send cash to an individual.
eThaler Set To Create Central Bank Digital Currency (CBDC)
At a planned meeting at Hyperledger, a blockchain consortium, it was decided to accelerate its efforts in the development of eThaler, an Ethereum based project aiming to create a CBDC. While the need for a CBDC has only been a priority to a small number of governments, the current COVID-19 virus pandemic, is setting a new stage for governments to become more “blockchain-friendly,” the U.S becoming the latest superpower to join the race.
In February, a clear use of the CBDC started to show as California Congresswoman and chair of the House Financial Services Committee, Maxine Waters, introduced the concept of a digital dollar, firing up the accelerated development of Hyperledger’s, eThaler.
Vipin Bharathan, 59, chair of the Hyperledger identity working group said,
“The concept of the CBDC seems to have gotten an imprimatur from the house finance committee. That’s a significant step, and I argue that such crisis situations always produce new ideas, and acceptance of new ideas, which will live on long after the coronavirus has burned through the world.”
Development of the eThaler, CBDC project
Over the past six months, developers across the world have kept working on open-source projects – professionals from Accenture and InfoSys and the Itau Bank in Brazil – leading the charge. The token follows the ERC-1125 standard, which differs from the conventional ERC-20 token standards by providing a single standard designed to support multiple kinds of tokens.
The token is expected to be fungible, mintable and destroyable through a burning process similar to Binance Coin (BNB) structure. Notwithstanding the CBDC is expected to be highly divisible to allow micropayments across the system, a feature currently unavailable with fiat currency.
“Lastly, and perhaps most controversially, the asset must be “pausable” in case a bug in the software is discovered, or an update is being implemented.” – Forbes.
Criticisms of the CBDC
Despite the accelerated development of the platform, it may not be used for the current disbursement of the $2.2 trillion dollar relief fund with several critics coming forward to disclaim the formation of a CBDC.
First, the legacy finance argument is that most of the currency across the world is already on a digital platform. Doubling up, is the Bitcoin community who believe that the central banks interference still makes the blockchain centralized hence defeating the purpose.