Central Bank Digital Currency

Progress on central bank digital currencies has been relatively slow. But a flurry of tests near the end of the year suggest CBDC initiatives are improving their pace, as central banks try to determine the impact on traditional banking and payment systems.

Even as debatein the U.S. rages over the utility of a digital dollar, work continues on the nuts and bolts of a potential American CBDC.

Wholesale CBDCs are designed for large parties to move substantial amounts of money, and are considered likely to be implemented faster than retail CBDCs, which are designed for consumer use.

In a second project, the New York Fed is participating in a proof-of-concept test that will determine the feasibility of digital currencies operating in a network of financial institutions.