The research paper published by a joint collaboration between the Federal Reserve Bank of Boston (or the Fed of Boston) and the Massachusetts Institute of Technology (MIT) showed results of a CBDC prototype.
With CBDCs being a popular talking point amongst multiple countries across the world, some regions have already begun testing their own digital currencies.
Only 9 places in the world, based on the AtlanticCouncil CBDC tracker, have fully launched their central bank digital currencies: the Bahamas, Nigeria, and 7 territorial units in the Eastern Caribbean Islands.
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On the other hand, the United States seemingly looks to evaluate the full extent of CBDCs before launching them for commercial use.
The report posted by the Fed and MIT on February 3rd, called Project Hamilton, showed the potential upsides and risks of CBDC technology and summarized the test results of the first phase of the project.
Project Hamilton was initially launched back in 2020 for the purpose of creating pilot versions of central bank digital currencies, and evaluating their performance.
With the first phase of the CBDC prototype, the Project Hamilton team evaluated how the central bank's digital currency performs on two separate occasions.
At first, they’ve enabled an architectural process "through and ordering server” by grouping multiple confirmed transactions and listing them in a strict order. The results of this test showed a 99% success, with most transactions going through in less than 0.7 seconds.
With that being said, the process got bottlenecked, leading to a "peak throughput of approximately 170,000 transactions per second."
For the other test, or architectural process, the team used several computers instead of one in a parallel "on a single ordering server" to avoid any double-spending when the same digital asset, a CBDC in this case, is used more than once.
As a result, the test showed that 99% of the 1.7M transactions were successfully performed under a second. However, the speed did not transition into the ordered history, because some transactions were not placed in the right order.
The next phase of the project will feature "new functionality and alternative technical designs" related to privacy, smart contracts, offline payments, security, etc.
While there are some smaller countries in the Caribbean and Africa that officially launched their CBDCs, currently, the largest country with the most advanced CBDC's is said to be China, which premiered its digital yuan today, at the Winter Olympics 2022 in Beijing.
