The Digital Dollar Project (DDP) has launched a sandbox to explore questions around the technical implementation of a US central bank digital currency (CBDC), with Ripple and Knox Networks among the initial participants.
The non-profit’s Technical Sandbox Program, which is set to begin in early October, is intended to be a “collaborative space” for the DDP participants and financial service providers to evaluate the technological, business and policy approaches to CBDCs.
DDP said its inaugural cohort will be focused on cross-border payments.
Each cohort of the program will have two phases, the first of which is about education, and will see DDP partners and participants develop a business and functional understanding of the technology and evaluate the differences in possible design choices.
The following “pilot phase” will identify and test specific CBDC use case hypotheses with the aim of gathering data on business-level impacts, DDP said.
“The launch of our Technical Sandbox Program marks the next step in our effort to convene the private and public sector in exploration of a central bank digital currency in the US,” said Jennifer Lassiter, executive director of The Digital Dollar Project.
She added: “We understand how important it is to include a diverse set of views and expertise as we look to answer key questions about how the technology could work, the problems we hope to solve, and the ultimate business and individual outcomes we want to achieve.
“The marriage of these sectors in our collaboration is essential and will lay the foundation for robust pilots that improve the outcomes and usability of CBDCs.”
Digital Asset and EMTECH are also taking part in the program.
DDP was established to encourage research and public discussion on the potential advantages and challenges of a US CBDC, or a digital dollar.
In March this year, the Bank of Canada teamed up with the Massachusetts Institute of Technology Media Lab’s Digital Currency Initiative to undertake a 12-month research project on a CBDC.