Project Hamilton: A Leap Towards a Digital Dollar or Just Another Tech Experiment?

Wrapping Up Project Hamilton

The buzz surrounding Project Hamilton, the joint initiative between the United States Federal Reserve Bank of Boston and the Massachusetts Institute of Technology, culminated just in time for the holiday season. After two years of intensive research, the team has pulled the curtain down on their ambitious exploration into what a U.S. digital dollar could look like. As Boston Fed’s own Jim Cunha stated, the project has paved the way toward a better understanding of our monetary future, though many are left wondering what ‘better’ really entails.

From Theory to Practice: What We Learned

The project’s goal was straightforward yet complex: delve into the technical side of a potential central bank digital currency (CBDC). Back in February, the team unleashed their white paper and a shiny open-source software named OpenCBDC. This software came in two flavors, including one that didn’t rely on distributed ledger technology. The vision, as they promised, was grand—covering aspects like privacy, auditability, programmability, and interoperability. Clearly, they didn’t just dip a toe; they took a full plunge into the deep end of digital currency possibilities.

Impressive Throughput: Numbers that Dazzle

Fast forward to the December announcement, which celebrated an impressive milestone: OpenCBDC now boasts a jaw-dropping throughput of 1.84 million transactions per second! That’s right, nearly two million transactions—way more than what we see from your average coffee shop card machine. In case you’re wondering, the non-blockchain version is doing fine at 1.7 million transactions per second, while the blockchain variant chugs along at a respectable 170,000 transactions per second. If only your Wi-Fi could be this speedy!

Legislative Scrutiny: What’s the Big Deal?

But as always, where there are advancements, there are eyebrows raised. On December 1, a group of nine U.S. legislators, led by Representative Tom Emmer, sent a letter to the Boston Fed raising concerns about Project Hamilton. Their chief worry? A perceived lack of transparency regarding private sector involvement in the research. These lawmakers were not shy in asking whether this could create an unfair advantage for certain companies in the forthcoming CBDC landscape.

Looking Ahead: What’s Next for Digital Currency?

Still, the fun doesn’t stop here. The Digital Currency Initiative has plans for a “research release” slated for January 12, 2023, focusing on the intersections of CBDC and financial inclusion. This could prove crucial in ensuring that, should a digital dollar emerge, it serves all Americans and doesn’t just become a playground for tech giants.

So as we toast to a New Year, we’re left pondering: Is Project Hamilton a blueprint for a groundbreaking U.S. digital dollar, or just another tech experiment destined to end up like your uncle’s Christmas fruitcake—sitting in the back of the pantry for all eternity?