DTCC is working on the prototype in collaboration with The Digital Dollar Project, a nonprofit organization, intended to demonstrate how CBDCs can be used in real time among market participants.
The Lithium Project will also identify how these “digital dollars” could use existing DTCC clearing and settlement capabilities to reduce counterparty risk, drive capital efficiency, add regulatory transparency, and ensure the delivery of cash and securities.
“You have to start thinking about the community building effort, what it takes to integrate that particular payment lane into organizations, into businesses, and how it interoperates with existing monetary systems.”said Jennifer Peve, DTCC’s chief of strategy and business development.
A digital dollar could transform the financial system, accelerating payments around the world and giving consumers greater access to the financial system, the US Federal Reserve reported in a research paper in January. However, a poorly designed digital dollar could weaken banks, destabilize the financial system, and create privacy issues.
“For several years, DTCC has been experimenting, engaging, and leading the conversation on digitizing financial markets, and Project Lithium represents the next big step in our exploration of DLT, tokenization, and other emerging technologies,” said Jennifer Peve, CEO. , director of strategy and business development at DTCC. “The Lithium Project will lay the foundation for the financial community to better assess the implications of a CBDC throughout the business life cycle, as interest in this style of financing continues to grow.”
Source: Ambito
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